Bank of Canada holds policy rate at 2¾% again

The Bank of Canada chose to hold its overnight interest rate at 2.75% today, sticking to its current policy as it navigates a complex economic landscape marked by global trade uncertainty and persistent inflation.

The move was widely anticipated by analysts and economists, particularly after April’s inflation numbers came in hotter than expected and GDP growth outpaced forecasts. Many experts predicted that the central bank would hold off on any further cuts until it has more clarity on both domestic and international developments.

“With uncertainty about US tariffs still high, the Canadian economy softer but not sharply weaker, and some unexpected firmness in recent inflation data, Governing Council decided to hold the policy rate as we gain more information on US trade policy and its impacts,” the Bank said in a statement. “We will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs.”

Since June 2024, the BoC had aggressively lowered rates—seven cuts in a row—before pausing in April at the current 2.75% level. That easing cycle aimed to support an economy that had been slowing under the weight of high borrowing costs.

Although today’s rate hold was expected by 20 of 26 economists surveyed by Reuters, a similar number also believe at least two more cuts could be on the horizon later this year—depending on how inflation and trade conditions evolve.

The Bank’s ongoing balancing act between cooling inflation and maintaining economic momentum remains the key focus. For now, it seems policymakers are playing it safe, waiting for more data before making their next move.

Media Relations

Ottawa, ON

June 4, 2025