The Bank of Canada maintained its key interest rate at 2.25% on Wednesday, a move anticipated by economists as the nation navigates a period of economic uncertainty. The decision comes amid concerns over fluctuating global trade policies and geopolitical instability, factors the central bank cites as weighing on Canada’s economic outlook. This marks the second consecutive month the rate has held steady,following a series of cuts in late 2025,as the Bank assesses ongoing adjustments within the Canadian economy.
Canada’s central bank held its key interest rate steady at 2.25% Wednesday, as widely anticipated by economists, amid a challenging economic outlook.
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The Bank of Canada indicated that the Canadian economic outlook has remained relatively stable in recent months, though it cautioned that “the unpredictability of U.S. trade policies and geopolitical risks are weakening the outlook.” This decision comes as investors closely monitor global economic headwinds.
“Governing Council judges that the current policy interest rate remains appropriate, provided the economy evolves broadly as projected today. Should the outlook change, we are prepared to act,” the central bank stated.
The bank’s accompanying Monetary Policy Report maintained its economic growth forecasts for Canada at 1.1% in 2026 and 1.5% in 2027. However, officials noted that uncertainty surrounding these projections is “unusually high.”
The upcoming review of the Canada-United States-Mexico Agreement (CUSMA) was specifically identified as “a significant risk” to the Canadian economy.
Governor Tiff Macklem explained that the economy is adjusting to headwinds and businesses are restructuring their supply chains, “but such changes take time.”
The Bank of Canada previously held its key interest rate at 2.25% in December, following two consecutive quarter-point cuts in the latter half of 2025. At that time, Governor Macklem indicated the rate was at an appropriate level to support the economy, suggesting it could remain there for several months.
Since then, the unemployment rate has edged up to 6.8%, and inflation has remained near the central bank’s 2% target, reinforcing the leadership’s decision to hold rates steady.
However, the Bank of Canada refrained from signaling the likely path of future interest rate adjustments. “The consensus was that the high degree of uncertainty makes it difficult to predict the timing or direction of the next rate change,” the Governor said.
