OTTAWA — The Bank of Canada has held its target for the overnight rate at 3.25 per cent, with the Bank Rate at 3.5 per cent and the deposit rate at 3.25 per cent. The central bank's Governing Council noted that consumer price index (CPI) inflation has continued to track near the two per cent target, providing room for monetary policy stabilization.
In its official announcement from Bank headquarters in Ottawa, Governor Tiff Macklem emphasized that while shelter price growth remains elevated, broader inflationary pressures across consumer goods and services have moderated significantly over the past two quarters. Economic growth picked up slightly in the first half of the year, driven by consumer spending and natural resource exports, but labour market conditions have gradually rebalanced.
"Our decision today reflects the governing council's assessment that monetary policy is operating as intended," Macklem stated during the press conference. "We are seeing clear signs that higher interest rates have brought supply and demand back into alignment, though we remain vigilant regarding structural housing supply deficits."
Financial markets reacted with relative stability following the announcement, with the Canadian dollar holding steady against the U.S. dollar. Institutional economists at major Canadian banks project that rate policy will remain neutral through the remainder of the year unless unexpected geopolitical shocks disrupt commodity trade flows.