Bank of Canada Holds Rate at 2.75% for 2nd Meeting

2025-06-04 13:55 By Felipe Alarcon 1 min. read

The Bank of Canada held its benchmark interest rate unchanged at 2.75% in its June 2025 decision, as expected by half of the market, to mark the second hold following 2.25 percentage points of cuts in seven consecutive decisions.

The governing council noted that the ongoing increase and decrease of various US tariffs, coupled with highly uncertain outcomes of bilateral trade negotiations and tariff rates remaining well above their levels at the beginning of 2025, placed downside risks on growth and lifted inflation expectations, warranting caution regarding the continuation of monetary easing.

The higher uncertainty stemmed from the absence of a clear tariff path by the US and persistent threats of new trade actions, which prompted the BoC Governing Council to highlight risks such as the extent to which higher US tariffs reduce demand for Canadian exports.



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