Bank of Canada holds key rate at 2.75% for third time amid tariff uncertainty

The Bank of Canada has held its key interest rate at 2.75 per cent for the third consecutive time, as the Crown Corporation navigates ongoing uncertainty related to tariffs.

Despite some resilience in the Canadian economy, the central bank highlights the continued unpredictability of U.S. trade policy.

Ontario Premier Doug Ford has criticized the decision of the bank.

I’m shocked by this decision. As we stare down economic uncertainty that’s putting hundreds of thousands of jobs at risk, it’s never been more important to stimulate economic growth and keep Canadians working. Rather than wait around and let President Trump’s tariffs do even more… https://t.co/ZtNttzCgGW

— Doug Ford (@fordnation) July 30, 2025

Ford says the Bank of Canada should cut interest rates so U.S. President Donald Trump’s tariffs don’t do more damage to the Canadian economy.

Governor Tiff Macklem notes a diminished risk of a severe global trade war in recent months, though the Canadian economy likely shrunk last quarter from the impact of tariffs.

If the current tariff situation persists, the Bank of Canada anticipates an economic rebound throughout the remainder of the year, with inflation expected to remain near its two percent target.

Macklem indicated that the bank might consider rate cuts if the economy weakens further and tariff-related inflation stays contained.

The Bank of Canada will adopt a less forward-looking approach than usual, closely monitoring how trade disruptions affect consumer prices and business activity.

With files from the Canadian Press. 

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