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Bank of Canada Sets New Interest Rate

Wednesday, 16 April 2025 at 10:47

By Georgia Newman

Bank of Canada Governor, Tiff Macklem (Credit: Bank of Canada)

The latest interest rate and monetary report was released this morning.

CANADA - The Bank of Canada is holding its key interest rate steady at 2.75 per cent.

This is the first time since last June that the rate hasn't decreased.

During a press conference this morning, Bank of Canada Governor Tiff Macklem said this will give the central bank more time to see how the U.S. tariffs will impact Canada's economy.

"If we find ourselves in a protracted trade war, we will see opposing pressures on inflation. A weaker economy will put downward pressure on inflation, and higher costs from tariffs will put upward pressure. Both the uncertainty about tariffs and their opposing forces on inflation make forecasting inflation especially difficult at this time."

The report showed two scenarios for how inflation may develop in the coming months.

The tariffs could be negotiated away quickly. The economy would still stall, but there would be little damage.

The other scenario is a lengthy global trade war that would send Canada into a recession for a year. 

The next interest rate announcement is scheduled for June 4, 2025, and the next monetary policy will be published on July 30, 2025.

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