Bank of Canada Holds 5% Policy Rate Amid Global Slowdown and Inflation Worries

Bank of Canada keeps policy rate steady at 5% and maintains its quantitative tightening policy. The global economy is slowing, and growth is expected to moderate due to past rate increases and increased bond yields. In Canada, past interest rate hikes are impacting economic activity, but indicators suggest the economy is approaching balance.

Tiff Macklem, governor of the Bank of Canada, says core inflation — which strips out volatile parts of the consumer price index — gives the bank a sense of where the trend is.

Inflation remains a concern, with CPI inflation expected to average around 3.5% before gradually easing to 2% by 2025. The Bank remains committed to restoring price stability for Canadians and is prepared to raise rates further if necessary.