The Bank of Canada is keeping its key rate at 2.25% and maintaining its growth forecasts for the Canadian economy.
Posted at 6:34 am.
Updated at 9:52 am.
“The evidence (since the latest forecasts) reassures us that the economy is indeed managing to weather this period of global turmoil,” Gov. Tiff Macklem said in a press statement following the rate announcement.
Inflation peaked at 3.2% in May, the highest level since late 2023. The central bank still views this inflationary spike due to the war in Iran and rising oil prices as temporary, but says it is prepared to raise interest rates if price increases spread across all goods and services.
The vast majority of economists expected the central bank to keep its key rate at 2.25%. Despite the threat posed by the US trade war, the labor market is stable and the economy appears to be improving after a negative first quarter. Gross domestic product increased 0.5% in April, according to Statistics Canada.
More detailed information will come later.