Bank of Canada Holds Policy Rates Steady at 2.25%

The Bank of Canada has maintained its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. This decision comes as major economies globally continue to show resilience to US trade protectionism, despite high uncertainty. The Canadian economy grew by a surprising 2.6% in the third quarter, driven by volatility in trade. The labour market is showing signs of improvement, with employment gains and an unemployment rate of 6.5% in November. CPI inflation slowed to 2.2% in October, remaining close to the 2% target. The Bank expects ongoing economic slack to offset cost pressures, keeping inflation near target. With uncertainty elevated, the Bank is prepared to respond if the outlook changes, focusing on maintaining price stability.