Overview

• The Bank of Canada held its policy rate at 2.75% on April 16, 2025, following seven consecutive rate cuts since mid-2024.
• Governor Tiff Macklem emphasized the uncertainty caused by U.S. trade tariffs, which have disrupted economic forecasts and shaken business and consumer confidence.
• The Monetary Policy Report outlined two scenarios: one with limited tariff impacts and stable inflation, and another with a prolonged trade war leading to recession and inflation above 3%.
• Economic indicators show slowing business investment, weaker household spending, and declining employment, with second-quarter GDP growth expected to drop significantly.
• Market analysts remain divided on whether this pause signals a longer-term hold or precedes further rate cuts as the trade situation evolves.