Bank of Canada Decides to Keep Policy Rate at 2.75%
The Bank of Canada held its key policy rate at 2.75% on Wednesday, as U.S. President Donald Trump's tariffs continued to filter through the economy, weighing on businesses and consumers, according to Bloomberg Live.
It was the first time in the ten months since the BoC began its rate-cutting cycle that markets, economists, and analysts were almost evenly split on what the bank would decide. Leading up to the announcement, uncertainty over Trump’s next tariff moves had led some to expect an eighth consecutive rate cut.
Ahead of the decision, currency markets had placed a 56% probability on a rate pause, down from over 60% earlier in the week. Those odds shifted after Tuesday’s inflation data showed prices had cooled unexpectedly in March.
A Reuters poll of economists Bank of Canada hold rate at 2,75% between April 7 and 11 showed most anticipated the bank would hold rates steady, though they also projected two more cuts later this year.
“We saw the Bank holding its target policy rate at 2.75%, opting for a ‘wait-and-see’ approach amidst an uncertain backdrop,” economists Ethan Currie and Warren Lovely of the National Bank of Canada wrote in a report ahead of the announcement. However, they emphasized that this should not be seen as the end of the rate-cutting cycle, forecasting another cut in June.
The central bank has now reduced its benchmark rate by 225 basis points since June, with the most recent cut made in March. This rapid easing cycle has made it the only major global central bank to move rates downward at such a fast pace.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a "detective-like" mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
