Bank of Canada Holds Interest Rate Steady at 2.75%

The Bank of Canada is keeping its key interest rate at 2.75%. Global trade tensions, especially from the U.S., are creating uncertainty and making it hard to predict economic growth and inflation.

Two possible trade scenarios are outlined:

1. Mild tariffs – growth slows briefly, but inflation stays near 2%.

2. A full trade war – Canada could enter a recession and see inflation rise above 3%.

The global economy is slowing, with signs of weakness in the U.S., Europe, and China. Tariffs are causing market volatility and lower oil prices. In Canada, consumer and business confidence is down, hiring is slowing, and inflation was 2.3% in March.

The Bank will closely monitor the economy and inflation pressures but says it can't fix trade tensions—its job is to keep prices stable and support economic growth.

Next rate announcement: June 4, 2025