The Bank of Canada today held its target for the overnight rate at 2.25 per cent.

Pointing to the evolving conflict in the Middle East causing heightened volatility and US trade policy that continues to reshape global trade patterns. BOC governor Tiff Macklem says both are ongoing sources of uncertainty. The Bank’s April outlook assumes tariffs remain unchanged and the global benchmark price of oil declines to US$75 per barrel by mid 2027.

Projections for inflation over the next year are revised up because of the jump in energy prices and the outlook for economic growth in Canada is little changed from the January Monetary Policy Report (MPR) projection with consumer and government spending supporting economic activity, while tariffs and trade uncertainty are weighing on exports and business investment.

The BOC also said housing activity also declined in the fourth quarter and is being held back by slow population growth,