Bank of Canada holds rates at 2.25% amid economic uncertainty
The central bank delivered its fifth consecutive hold as inflation ticked up and job growth surprised. Turbulence ahead for borrowers and savers alike.
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The Bank of Canada kept its benchmark interest rate steady at 2.25% Wednesday morning, maintaining its pause as the economy sends mixed signals.
Inflation jumped to 2.8% in April, pushed higher by energy prices tied to conflict in the Middle East. Yet the economy contracted slightly in the first quarter, undershooting the bank's forecast. May's jobs report offered some relief: Canada added 88,000 positions, a surprise gain that partially offset earlier employment losses.
The central bank has held rates constant all year while waiting for clarity on how the Iran war and U.S. trade uncertainty will reshape growth and prices. Neither has resolved. A decision to move rates—up or down—would signal confidence in one direction; holding buys time.
Vancouver borrowers should watch how long this pause lasts. Mortgage renewals are still elevated, and any future cut would ease pressure on households already stretched by housing costs.