Overview
- The Bank of Canada kept its overnight policy rate at 2.25% on Sept. 2, 2026 and said it will track new CPI, labour and trade-impact data ahead of its next policy decision on Oct. 28.
- Officials said the Canadian economy showed a broadening rebound in Q2 with annualized GDP rising 3.3% and the unemployment rate easing to about 6.4%.
- Headline inflation climbed to roughly 3% in July mainly because gasoline prices rose, while the Bank’s preferred core measures remained close to the 2% target.
- The bank warned that President Donald Trump’s 50% tariffs on a large set of Canadian goods and Canada’s retaliatory duties due Sept. 8 have increased uncertainty by both weighing on exports and by adding direct cost pressures that could lift some consumer prices.
- Governing Council described its stance as a cautious hold with a modest tilt toward tightening if inflation proves persistent, and it stressed that monetary policy cannot undo tariff or global energy shocks so fiscal or targeted supports may be needed for hit sectors.