The Bank of Canada announced Wednesday morning that it is keeping its key interest rate at 2.25 per cent.
In a widely expected move, the bank chose to stand pat at its fifth meeting of the year, as the economy has been showing signs of improvement following a weak start to 2026.
“Overall, our growth outlook is similar to our April forecast, but the data we have received since April have increased our confidence that the economy is indeed working its way through this period of global upheaval,” bank governor Tiff Macklem said in his prepared remarks.
The governor noted that consumer spending has been solid, while housing activity appears to be recovering. Business investment is also picking up, driven by the oil and gas sector.
And, he said, while the Canada-United States-Mexico Agreement (CUSMA) wasn’t renewed on July 1, businesses are managing to navigate through the trade uncertainty.
Meanwhile, the bank’s preferred “core” measures of inflation — which strip out volatility — have been steady, supporting the case for another pause.
“Inflation in Canada is poised to ease gradually provided global oil prices decline from elevated levels,” Macklem said.
“Uncertainty is still high,” he cautioned. “Governing council will continue to assess the strength of the Canadian economy and the outlook for inflation and is prepared to adjust monetary policy as needed.”
Wednesday’s announcement will be followed by a press conference hosted by Macklem and senior deputy governor Carolyn Rogers at around 10:45 a.m.
Observers will be watching the central bank’s communications closely to try to forecast where interest rates will go next.
This is a developing story.
