Bank of Canada holds key rate steady at 2.25%, predicts economic rebound
The Bank of Canada has maintained its benchmark interest rate at 2.25% while expressing cautious optimism about an economic rebound. Officials noted that while global energy prices and Middle Eastern instability remain risks, current rates are deemed appropriate to manage inflation.
Why it matters
Interest rate decisions directly impact consumer borrowing costs, mortgage rates, and the overall trajectory of the Canadian economy.
OTTAWA — The Bank of Canada struck a somewhat optimistic tone about the economy after holding its policy rate steady on Wednesday but officials warned that instability in the Middle East is still weighing heavily on the outlook.
The central bank’s benchmark interest rate remains at 2.25 per cent after the sixth consecutive hold, which was widely expected by economists.
Bank of Canada governor Tiff Macklem said the economy is still grappling with heightened uncertainty but officials at the bank are growing more confident that the economy is working its way through those headwinds.
While he signalled that the bank’s governing council is still ready to adjust its policy rate if needed, he said officials see the current rate as being at the right level to return inflation back to two per cent and support an economic recovery.
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