The Bank of Canada (BoC) announced Wednesday that it’s holding its key interest rate steady at 2.75%, citing tariffs, inflation and unpredictability.It has kept its target for the overnight rate unchanged at 2.75%, with the bank rate at 3% and the deposit rate at 2.70%.“This decision reflects three main considerations. First, uncertainty about US tariffs on Canada is still high. Discussions between Canada and the United States are ongoing, and US policy remains unpredictable,” said Governor of the BoC, Tiff Macklem.“Second, while US tariffs are disrupting trade, so far, Canada's economy is showing some resilience. And third, inflation is close to our 2% target, but we see evidence of underlying inflation pressures.”Tariffs have risen significantly since the beginning of 2025, and the outlook for US trade policy remains highly uncertain..Economist says Canada-US trade deal needs fresh perspective.Although economic activity in Canada has slowed, signs of resilience persist, according to the central bank.Statistics Canada said earlier this month that the rate of inflation rose to 1.9% in the month of June. The slight increase came after the pace of inflation held steady at 1.7% in May."The Bank of Canada is committed to keeping inflation between 1 and 3%, and inflation came in at 1.9%," Moshe Lander, an economics professor at Concordia University told the Western Standard in an interview. "This is perfect given that we're five months into a trade war with the US. Damage from the tariffs has not yet shown up in the data, which is actually a good thing. So, there may be a little bit of worrying signs for people who are hoping for an interest rate cut."Lander says the BoC's decision to hold the key interest rate steady at 2.75% was expected, noting that cutting rates prematurely has "implications."The central bank has held its interest rate steady for the last three rate announcements in April, June, and July. This comes after seven consecutive cuts since last summer.The Bank of Canada is set to announce its next overnight rate target decision on September 17..Trump says Canada-US trade talk deadline will not be extended
