Bank of Canada Holds Rate at 2.75%, Keeps Easing Bias

On July 30, 2025, the Bank of Canada left its key rate unchanged at 2.75%, marking a third straight hold (BoC). The decision came amid lingering U.S. tariff risks, prompting the Bank to present scenario-based forecasts instead of a single outlook.

Governor Tiff Macklem noted that while global trade war fears have eased, tariffs on steel, aluminum, and autos continue to weigh on Canada’s economy. Inflation remains slightly elevated—underlying measures near 2.5%–3%—but slowing growth and softer wage pressures are creating slack.

Officials signaled that future cuts are possible if conditions weaken further. Markets responded with a weaker loonie, which slipped to a two‑month low around C$1.38 per U.S. dollar.

Key Takeaways

• Rate steady at 2.75%.

• Scenario-based outlook tied to trade uncertainty.

• Inflation elevated but stable.

• BoC keeps door open to cuts later in 2025.

Analysts expect the Bank to remain cautious, balancing inflation control against growth risks.