BANK OF CANADA HOLDS KEY INTEREST RATE AT 2.75% DESPITE WEAKENING INFLATION, AS TARIFF WAR THREATENS GLOBAL ECONOMY.
- Apr 16
- 1 min read
The Bank of Canada held its benchmark interest rate steady at 2.75 per cent on Wednesday, ending a run of seven consecutive cuts. The decision, for which the market had given roughly even odds, comes following weakening inflation data published yesterday, and as Canadian and global economies contend with U.S. President Donald Trump’s twisting trade war.
In its decision, the Bank noted various signs of the Canadian economy slowing, and outlined two possible scenarios that underline the uncertainty of the trade war.
“Consumption, residential investment and business spending all look to have weakened in the first quarter,” the central bank said in a statement alongside the decision.
“Trade tensions are also disrupting recovery in the labour market. Employment declined in March and businesses are reporting plans to slow their hiring. Wage growth continues to show signs of moderation.”
Since June of 2024 the central bank had cut its policy rate from 5 per cent in seven straight decisions.
Listen to Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers answering reporter questions after the release of the Bank's latest rate decision.
