Bank of Canada holds key interest rate at 2.75% in close-call decision amid Trump tariff uncertainty

Bank of Canada governor Tiff Macklem emphasized that the bank cannot undo the devastating impacts of a trade war, and it needs to keep inflation under control. 

Governor Tiff Macklem said the Bank of Canada policymakers remain cautious about interest rate moves going forward, but “are prepared to act decisively if incoming information points clearly in one direction.”

The Bank of Canada has kept its key interest rate at 2.75 per cent, choosing not to add more support to the economy, as uncertainty around U.S. President Donald Trump’s tariffs clouds the Canadian economic forecast.

Bank of Canada governor Tiff Macklem said central bankers considered cutting the policy rate by 0.25 percentage points, but ultimately decided against it, as they seek more clarity on the future of U.S. trade policy and its impacts.