The Bank of Canada has decided to keep its key interest rate at 2.25% for now.
This comes despite rising oil prices and global tensions. While some expected a rate hike to control inflation, the Bank chose to hold steady and watch how things unfold.
No immediate changes, but lots of uncertainty ahead.
📊 What’s Happening in Canada’s Economy?
- The economy slowed down at the end of 2025 but is starting to pick back up in 2026
- Consumer and government spending are helping keep things moving
- Trade issues and tariffs are holding back business growth and exports
Inflation Update
Inflation rose to 2.4% in March, mainly driven by higher gas prices. This follows a few months where inflation was cooling. Core inflation is still just above 2%. Pressure is coming more from energy than everything else
Housing & Jobs
Housing activity has slowed down, mainly due to affordability challenges and economic uncertainty. The labour market is also soft, with unemployment between 6.5% and 7%, which can impact buyer confidence and mortgage qualification.
⛽ Oil, War & Market Volatility
The conflict in the Middle East is pushing oil prices higher and creating market volatility. At the same time, bond yields are slightly up and markets are reacting quickly to global events.
This uncertainty is a big reason the Bank is staying cautious.
🧠 Why the Bank Is Holding
The Bank sees the economy as stable enough for now. Higher oil prices are helping Canada overall, but are also raising costs for consumers.
- No clear signs inflation is spreading beyond gas
- Short-term expectations are rising
- Long-term expectations are still stable
👉 Expect more wait-and-see decisions in the near term.
No matter where rates go next, having the right strategy makes all the difference.
We’re here to help you understand your options and move forward with confidence.