The Bank of Canada held its overnight rate at 2.25% on June 10, citing a mix of domestic weakness and global turbulence that has complicated the economic outlook.
Canada’s GDP slipped 0.1% in Q1, weaker than the Bank had projected in April, and the economy is expected to remain in excess supply even as growth rebounds modestly in Q2.
Unemployment has held in the 6.5–7% range, with the May reading at 6.6%.
Inflation rose to 2.8% in April, driven largely by energy prices and the year-over-year effect of the carbon tax elimination dropping out of the calculation.
Core inflation has eased to around 2%. With oil prices running roughly $10 a barrel above April projections, the Bank expects headline inflation to hover near 3% in the near term before gradually returning to target.
Governing Council flagged the ongoing Middle East conflict and persistent US trade policy uncertainty as key risks.
The Bank said it will look through the war’s near-term inflationary impact but won’t allow elevated energy prices to translate into persistent inflation.
The next rate decision is scheduled for July 15. A full 2026 schedule can be found here.
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