By Paul Vieira
OTTAWA--The Bank of Canada on Wednesday kept its main interest rate unchanged at 2.25%, and signaled the rate may stay close to that level so long as the economy evolves as forecast.
The central bank's quarterly forecast expects that inflation peaks in April at around 3% and assumes crude-oil prices fall to $75 a barrel by mid-2027. The forecast also anticipates no changes in U.S. tariffs on Canadian goods -- so neither a breakthrough on U.S.-Canada trade talks nor an escalation in U.S. levies.
Overall, the Bank of Canada largely kept its growth forecast intact, noting the economy stands to benefit from current geopolitical volatility as a net exporter of crude oil. The economy resumed growth in early 2026 after a contraction in fourth quarter, the central bank said.
Gov. Tiff Macklem said officials agreed not to put too much weight on a near-term surge in inflation. "But if energy prices stay high, we will not let their effects become persistent inflation," he said. The Bank of Canada sets the target for the overnight rate to achieve and maintain 2%.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
04-29-26 1000ET
