The Bank of Canada held its benchmark interest rate steady again on Wednesday as new U.S. tariffs and the ongoing war in Iran cloud the central bank’s outlook.
The Bank of Canada’s policy rate remains at 2.25 per cent after a seventh straight hold. The move was widely expected by economists.
Bank of Canada governor Tiff Macklem said in prepared remarks that the persistence of the Middle East conflict has increased inflationary risks as global energy prices continue to float higher.
A re-escalation in the trade dispute with the United States meanwhile threatens Canada’s burgeoning economic rebound, he said. That renewed uncertainty might lead businesses to delay investment and hiring decisions until the trade picture crystalizes.
“Monetary policy cannot offset the effects of tariffs or influence global energy prices. What we can do is ensure global developments don’t jeopardize price stability in Canada,” Macklem said.
Get breaking National news
Monetary policymakers at the Bank of Canada use the policy rate to keep a lid on inflation and support economic growth when prices are contained.
Inflation rose to three per cent in July after the Iran war drove a volatile period for gas prices over the spring and summer.
Economic growth, meanwhile, has shown signs of rebounding after stagnating for much of the last year. The economy surged with 3.3 per cent annualized growth in the second quarter, though few analysts expect that same pace continued into the current quarter.
The United States imposed 50 per cent tariffs on a range of Canadian goods on Aug. 22. Macklem said the Bank of Canada doesn’t expect a “large direct impact” on the economy from the new duties, though targeted sectors could be hit hard.
- ‘Keep human culture alive’: Halifax music venue takes a stand against AI posters
- An island is floating around a B.C. reservoir — and it keeps disappearing
- Private company to take over New Brunswick veterinary services next year
- George Clooney calls out Pete Hegseth for mocking Canadian military cadets
Canada is planning a slate of retaliatory tariffs on U.S. goods starting Sept. 8.
Heading into the latest wave of tariffs, Macklem said exports were on the rise and there were signs businesses were adapting to trade restrictions.
“Overall, the data reaffirm our view of a broadening recovery,” he said.
Because the economy was evolving broadly in line with the bank’s forecasts, governing council opted to keep the policy rate unchanged, Macklem said.
But he said there could be future adjustments depending on where the economy and inflation go from here.
“Governing council will assess the sustainability of the economic rebound and the outlook for inflation, and is prepared to adjust monetary policy as needed,” Macklem said.
Raising the interest rate IS inflation and just makes it harder for ‘the average Canadian’ to make ends meet. Instead Tiff Macklem and his cronies should take a pay reduction and lead the way. ” Bank of Canada employees received nearly $72 million in bonuses and pay raises, with $20,214,667 handed out in 2022 alone” Perhaps Mr. Macklem should take a reduction in his pay of $463,100 to $544,800 per year. Another ‘Let them eat cake’ bureaucrat.
Interest rates need to be lowered to give the economy a little boost. Small businesses are already struggling, yet banks are making record profits every quarter!?! Their lobbying efforts are strong, and our governor seems out of touch with reality.
I think the Banks are living in the sky . I am a businessman.the reality at the ground is different. People are trying to cope, ther are losing their houses.this is because of the high interest rate.
The high interest rate is for the billions of profit for the bank.
Reduce the rate n stimulate the economy..
I guess my input is a waste of time
Find Online Jobs (500$-6000$ Weekly) safe and secure! Easy Acces To Information. Simple in use. All the Answers. Multiple sources combined. Fast and trusted. Discover us now! Easy & Fast, 99% Match.
.
Follow Here ………Www.PayAtHome1.Com
How long is the Bank of Canada going to ignore the state of our economy and stop protecting the government by pretending it’s everyone else fault that Canada is in big trouble with the debt and cost of living. Canadians know how bad things are they go to the grocery stores and they know it going to get a lot worse when these tariffs hit.