Reactions to latest interest rate announcement
Random comments followed the Bank of Canada’s decision to keep the overnight interest rate at 2.25 per cent for the eighth consecutive announcement.
The last time the interest rate was higher than 2.25 per cent was October 28, 2025. The next day it was lowered by .25 per cent.
This is an excerpt from the opening statement by Bank of Canada Governor Tiff Macklem:
“We have three main messages. First, economic growth in Canada has picked up after stalling over the past year. That puts us on a stronger footing as we face new challenges. But uncertainty about the sustainability of the rebound has increased with new US trade actions. Second, the ongoing conflict in the Middle East is keeping energy prices higher for longer, and this has increased the upside risks to the outlook for inflation. Third, the Bank of Canada is committed to keeping inflation close to the 2% target over time. We will be a source of stability as Canadians navigate shifting global developments.”
Derek Holt, vice president and head of capital markets economics at Scotiabank, in a research note reported by CBC News:
“There is a lot more information to digest between now and Oct. 28, such as data on inflation and jobs and GDP, plus energy market and trade developments, but the BoC very clearly cracked open the door by enough to increase flexibility to tighten as soon as the next meeting if everything co-operates.”
CIBC chief economist Avery Shenfeld, also in a CBC research note:
“Newly heightened uncertainty over trade relations clouds that picture too much to be definitive about what lies ahead. The bank did judge that the direct impact of the latest tariff round would not be large, but cited the uncertainties over trade as being a further drag. It didn’t mention the downside implications of a failure to lower the existing tariffs on autos, metals and lumber that most economic projections were assuming would take place.”
Frances Donald, chief economist at RBC, told CTV News that Macklem “put a stake in the ground” by emphasizing the risks of higher inflation, but that doesn’t necessarily imply rates are set to move higher: “We have a tendency to think about central banks as having this binary — hawkish or dovish. Are they hiking or are they cutting? But what was interesting more to me was how governor Macklem was prioritizing the multiple risks in play.”
The last time the interest rate was higher than 2.25 per cent was October 28, 2025. The next day it was lowered by .25 per cent.
This is an excerpt from the opening statement by Bank of Canada Governor Tiff Macklem:
“We have three main messages. First, economic growth in Canada has picked up after stalling over the past year. That puts us on a stronger footing as we face new challenges. But uncertainty about the sustainability of the rebound has increased with new US trade actions. Second, the ongoing conflict in the Middle East is keeping energy prices higher for longer, and this has increased the upside risks to the outlook for inflation. Third, the Bank of Canada is committed to keeping inflation close to the 2% target over time. We will be a source of stability as Canadians navigate shifting global developments.”
Derek Holt, vice president and head of capital markets economics at Scotiabank, in a research note reported by CBC News:
“There is a lot more information to digest between now and Oct. 28, such as data on inflation and jobs and GDP, plus energy market and trade developments, but the BoC very clearly cracked open the door by enough to increase flexibility to tighten as soon as the next meeting if everything co-operates.”
CIBC chief economist Avery Shenfeld, also in a CBC research note:
“Newly heightened uncertainty over trade relations clouds that picture too much to be definitive about what lies ahead. The bank did judge that the direct impact of the latest tariff round would not be large, but cited the uncertainties over trade as being a further drag. It didn’t mention the downside implications of a failure to lower the existing tariffs on autos, metals and lumber that most economic projections were assuming would take place.”
Frances Donald, chief economist at RBC, told CTV News that Macklem “put a stake in the ground” by emphasizing the risks of higher inflation, but that doesn’t necessarily imply rates are set to move higher: “We have a tendency to think about central banks as having this binary — hawkish or dovish. Are they hiking or are they cutting? But what was interesting more to me was how governor Macklem was prioritizing the multiple risks in play.”
