Bank of Canada holds key rate at 2.75% amid ongoing tariff turmoil

The Bank of Canada has announced its decision to hold the overnight rate at 2.75 per cent – meaning little change for consumers and homeowners.

This also marks the second time it has held the rate since March, signalling the Bank’s cautious approach until the impact of the Canada-U.S. trade war becomes clearer.

“Uncertainty remains high,” the Bank said in a statement.

“The Canadian economy is softer but not sharply weaker […] Against this backdrop, we decided to hold the policy rate unchanged as we continue to gain more information on US trade policy and its impacts.”

According to the bank, the trade war initiated by the Trump administration remains the largest problem area facing the Canadian economy.

CPI inflation rose 1.7 per cent, as the elimination of the federal consumer tax reduced this number by 0.6 percentage points. This is a notable easing compared to the 2.3 per cent increase seen in March.

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