The Bank of Canada keeps its policy rate at 2.75% and braces for the impacts of US trade policy.

• The BoC notes that US trade policy has “increased uncertainty, diminished prospects for economic growth, and raised inflation expectations.”
• The BoC is trying to balance how tariffs affect the inflation outlook and the growth outlook, and it’s decision to not change the policy rate was out of caution and the need for more information.
• Key quote: "Monetary policy cannot resolve trade uncertainty or offset the impacts of a trade war. What it can and must do is maintain price stability for Canadians."

• The BoC highlights two different scenarios. In both, economic activity weakens (though scenario 1 sees a smaller decline than in scenario 2), but in the first scenario, inflation remains contained while in the second, inflation jumps in earl 2026.
• Monetary Policy Report: April 2025