Bank of Canada holds interest rate steady

Photo: The Canadian Press

The Bank of Canada is set to make an interest rate decision on April 16, 2025. The Bank of Canada building is shown in Ottawa on Wednesday, March 12, 2025.

UPDATE 7:05 a.m.

Bank of Canada is hitting pause after seven straight interest rate cuts as it grapples with global trade uncertainty.

The central bank held its benchmark interest rate steady at 2.75 per cent today, the first time it has foregone a cut since last June.

Governor Tiff Macklem says the Bank of Canada kept the key rate unchanged to give the central bank more time to see how the U.S. tariff situation will impact the economy.

The Bank of Canada is also laying out a pair of economic scenarios for how that uncertainty could evolve.

One sees the tariffs negotiated away quickly and the economy stall but escape with limited damage, while the other envisions a lengthy global trade war that sends Canada into a recession for a year.

Macklem says the Bank of Canada is committed to keeping inflation under control and will proceed carefully with future rate decisions.

ORIGINAL 5:50 a.m.

The Bank of Canada is set to make an interest rate decision today amid looming trade war impacts to the economy.

The central bank cut its policy rate by a quarter point to 2.75 per cent at its most recent decision in March.

Market bets were nearly evenly split between a rate hold and a cut heading into Wednesday's meeting.

The decision comes a day after Statistics Canada reported the annual rate of inflation cooled to 2.3 per cent last month.

The rate decision also lands in the middle of Canada's tariff war with the United States, which many economists say complicates the central bank's decision.

The Bank of Canada warns it can't tackle both the economic hit from a tariff dispute with the United States and higher prices from the trade war at the same time.