Bank of Canada holds key interest rate despite tariff uncertainty

A trade war with the United States hasn’t moved the Bank of Canada’s key interest rate.

It remains at 2.75 percent, despite uncertainty south of the border.

BoC Governor Tiff Macklem says the economy was in good shape at the end of 2024, but tariffs have caused unpredictability.

“We still do not know whether tariffs will be imposed, whether they’ll be reduced or escalated, or how long all of this will last,” said Macklem.

Macklem adds the U.S. has diminished global growth prospects and increased inflation expectations.

The BoC decided to hold the rate because they’re looking to gain more information on tariff impacts.

Macklem says their focus is on Canadians continuing to have confidence in price stability through this period, and they want to support economic growth while controlling inflation.