Bank of Canada Keeps Key Interest Rate Unchanged but May Cut in the Future

The Bank of Canada kept its key benchmark interest rate unchanged at 2.75% on Wednesday, stating that it is necessary to investigate the impact of U.S. trade policy. However, it indicated that if the economy weakens due to tariffs, another rate cut might be necessary. This decision marks the second consecutive time the Bank of Canada has taken a wait-and-see approach, following a nine-month period of significant rate cuts that lowered the rate by 225 basis points. The Governor of the Bank of Canada said at a press conference, "The trade conflict initiated by the U.S. remains the biggest headwind facing the Canadian economy." He described U.S. trade policy as highly unpredictable. He stated, "While we gather more information, we have a clear consensus to keep the policy unchanged." (Jin10)