Bank of Canada Holds Key Rate at 2.75%
The Bank of Canada held its benchmark interest rate steady at 2.75 per cent Wednesday as policymakers keep waiting for more clarity on how tariffs will impact the economy.
The Bank of Canada held its benchmark interest rate steady at 2.75 per cent Wednesday as policymakers keep waiting for more clarity on how tariffs will impact the economy.
The Bank of Canada is leaving the door open to a possible rate cut, signaling it may act if the ongoing tariff dispute begins to drag down the economy while inflation remains under control.
Governor Tiff Macklem said the central bank will aim to strike a careful balance.
“We will continue to support economic growth while ensuring inflation remains well controlled,” he said.
While economic growth in the first quarter outpaced expectations and inflation slipped below two per cent in April, the Bank flagged warning signs beneath the surface.
April’s inflation rate fell to 1.7 per cent, mainly due to the federal government’s removal of the consumer carbon price, which lowered fuel costs. Without accounting for taxes, inflation would have reached 2.3 per cent—up from 2.1 per cent in March and above the Bank’s forecast.
The central bank also noted “unexpected firmness” in core inflation, with rising price pressures suggesting a possible link to recent trade disruptions.
Macklem emphasized it’s still too early to see the full impact of retaliatory tariffs in consumer prices, but hinted that emerging pressure could already be taking hold.
Canada’s economy grew at an annualized rate of 2.2 per cent in the first quarter, beating expectations—largely due to businesses speeding up purchases ahead of tariffs. That boost, Macklem warned, won’t last: growth is expected to slow sharply in the second quarter.
Sectors most exposed to global trade are beginning to show signs of weakness in the job market, while housing resales and government spending are also cooling. Though Canadian businesses and households have held up relatively well so far, Macklem said many remain cautious.
The Bank will continue monitoring how the tariff dispute plays into inflation before deciding on next steps.
Its next interest rate decision is scheduled for July 30, alongside a fresh monetary policy report.
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Bank of Canada Holds Key Rate at 2.75%
The Bank of Canada held its benchmark interest rate steady at 2.75 per cent Wednesday as policymakers keep waiting for more clarity on how tariffs will impact the economy.
The Bank of Canada held its benchmark interest rate steady at 2.75 per cent Wednesday as policymakers keep waiting for more clarity on how tariffs will impact the economy.
The Bank of Canada is leaving the door open to a possible rate cut, signaling it may act if the ongoing tariff dispute begins to drag down the economy while inflation remains under control.
Governor Tiff Macklem said the central bank will aim to strike a careful balance.
“We will continue to support economic growth while ensuring inflation remains well controlled,” he said.
While economic growth in the first quarter outpaced expectations and inflation slipped below two per cent in April, the Bank flagged warning signs beneath the surface.
April’s inflation rate fell to 1.7 per cent, mainly due to the federal government’s removal of the consumer carbon price, which lowered fuel costs. Without accounting for taxes, inflation would have reached 2.3 per cent—up from 2.1 per cent in March and above the Bank’s forecast.
The central bank also noted “unexpected firmness” in core inflation, with rising price pressures suggesting a possible link to recent trade disruptions.
Macklem emphasized it’s still too early to see the full impact of retaliatory tariffs in consumer prices, but hinted that emerging pressure could already be taking hold.
Canada’s economy grew at an annualized rate of 2.2 per cent in the first quarter, beating expectations—largely due to businesses speeding up purchases ahead of tariffs. That boost, Macklem warned, won’t last: growth is expected to slow sharply in the second quarter.
Sectors most exposed to global trade are beginning to show signs of weakness in the job market, while housing resales and government spending are also cooling. Though Canadian businesses and households have held up relatively well so far, Macklem said many remain cautious.
The Bank will continue monitoring how the tariff dispute plays into inflation before deciding on next steps.
Its next interest rate decision is scheduled for July 30, alongside a fresh monetary policy report.
Friday, 6/6
Bank of Canada Holds Key Rate at 2.75%
The Bank of Canada held its benchmark interest rate steady at 2.75 per cent Wednesday as policymakers keep waiting for more clarity on how tariffs will impact the economy.
Posted:
Jun 4, 2025
The Bank of Canada held its benchmark interest rate steady at 2.75 per cent Wednesday as policymakers keep waiting for more clarity on how tariffs will impact the economy.
The Bank of Canada is leaving the door open to a possible rate cut, signaling it may act if the ongoing tariff dispute begins to drag down the economy while inflation remains under control.
Governor Tiff Macklem said the central bank will aim to strike a careful balance.
“We will continue to support economic growth while ensuring inflation remains well controlled,” he said.
While economic growth in the first quarter outpaced expectations and inflation slipped below two per cent in April, the Bank flagged warning signs beneath the surface.
April’s inflation rate fell to 1.7 per cent, mainly due to the federal government’s removal of the consumer carbon price, which lowered fuel costs. Without accounting for taxes, inflation would have reached 2.3 per cent—up from 2.1 per cent in March and above the Bank’s forecast.
The central bank also noted “unexpected firmness” in core inflation, with rising price pressures suggesting a possible link to recent trade disruptions.
Macklem emphasized it’s still too early to see the full impact of retaliatory tariffs in consumer prices, but hinted that emerging pressure could already be taking hold.
Canada’s economy grew at an annualized rate of 2.2 per cent in the first quarter, beating expectations—largely due to businesses speeding up purchases ahead of tariffs. That boost, Macklem warned, won’t last: growth is expected to slow sharply in the second quarter.
Sectors most exposed to global trade are beginning to show signs of weakness in the job market, while housing resales and government spending are also cooling. Though Canadian businesses and households have held up relatively well so far, Macklem said many remain cautious.
The Bank will continue monitoring how the tariff dispute plays into inflation before deciding on next steps.
Its next interest rate decision is scheduled for July 30, alongside a fresh monetary policy report.
Please note that the information in this blog is for general guidance only and may not always be up to date or accurate. We recommend double-checking details directly with local cities, businesses, or official sources before making any plans.
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