Tuesday, October 21, 2025

Bank of Canada Maintains Rates At 2.75%, Citing Unpredictable US Trade Policies

The Bank of Canada has decided to hold its benchmark interest rate steady at 2.75%, marking a pause after seven consecutive rate cuts since June 2024. The central bank cited heightened uncertainty stemming from unpredictable U.S. trade policies and tariffs, which have significantly impacted economic outlooks domestically and globally.

Amid ongoing trade tensions, the bank presented two scenarios in its April Monetary Policy Report. The first envisions limited tariffs and high uncertainty, leading to a temporary slowdown in Canadian growth with inflation stabilizing around 2%. The second scenario foresees a prolonged trade war, potentially plunging Canada into recession and pushing inflation temporarily above 3%. These divergent paths underscore the unprecedented level of uncertainty faced, with the timing and magnitude of U.S. trade policy shifts remaining highly unpredictable.

READ: Canadian Business Outlook Clouded by Trade Tensions, Bank of Canada Survey Finds

Global economic growth showed resilience late last year but has since been tempered by tariffs and policy uncertainty. The United States exhibits signs of slowing amid deteriorating sentiment, while inflation expectations have risen. Europe’s growth remains modest, with manufacturing sector weakness persisting, and China’s economy has cooled after a strong end to 2024.

In Canada, economic activity slowed in the first quarter, with declines in consumer spending, residential investment, and employment. Wage growth has moderated, and inflation stood at 2.3% in March, slightly below expectations but still above the 1.8% rate in January. The recent drop in global oil prices and the removal of the consumer carbon tax are expected to dampen near-term inflation, though supply chain disruptions and tariffs could exert upward pressure.

Governor Tiff Macklem emphasized the Bank’s cautious approach, highlighting that monetary policy cannot resolve trade uncertainty but remains vital for maintaining price stability amid global upheaval.


Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

When 4% of Global Copper Disappears Overnight | David Gower – Emerita Resources

Mining M&A: Gold X2 Acquires Kesselrun Resources

They Said Oil Was Dead. They Were Wrong. | Michael Judson – Record Resources

Recommended

Steadright Enters MOU To Acquire Historic Goundafa Polymetallic Mine In Morocco

Military Seizes Power in Madagascar After President Flees

Related News

Bank Of Canada Pandemic Purchases Total To $795 Billion–Report

The COVID-19 pandemic triggered a global economic crisis, sending shockwaves through financial markets. In a...

Friday, October 13, 2023, 10:29:00 AM

Bank of Canada Maintains Target Rate At 5.00% At April Meeting

The Bank of Canada has maintained its target for the overnight rate at 5%. Despite...

Wednesday, April 10, 2024, 09:55:25 AM

Union Leader Accuses Bank Of Canada Governor Tiff Macklem Of Waging A Class War

“The medicine that the Bank has, with respect to inflation, is causing a lot of...

Tuesday, November 15, 2022, 05:57:00 PM

BC Premier Begs BoC For Interest Mercy: “Consider The Full Human Impact”

British Columbia’s Premier, David Eby, has taken a bold stance on the looming interest rate...

Friday, September 1, 2023, 11:07:04 AM

Canadian Businesses See Inflation, Labour Shortages Worsening

Business sentiment across Canada rose to a record-high in the third quarter, amid a strong...

Tuesday, October 19, 2021, 10:04:00 AM