Bank of Canada Holds Interest Rates Steady Amid Trade Uncertainty

On Wednesday, the Bank of Canada announced that it has left its benchmark interest rate unchanged as it awaits a clearer picture of how global trade uncertainty is going to impact the Canadian economy, the Canadian Press reported (4-16-25).

The Bank held its policy rate steady at 2.75%, the first time it has left the key rate unchanged following seven consecutive cuts since last June.

At a press conference, Bank of Canada governor Tiff Macklem made clear that the trade disruption from US policy was the clear focus of the decision.

The Bank signaled it would “proceed carefully” in setting future rates and will be watching to see how much US tariffs reduce demand for Canadian exports, dampen spending from businesses and consumers, how quickly new costs are passed on to customers, and how inflation expectations evolve.