By Paul Vieira
OTTAWA--Senior Bank of Canada policymakers were reluctant to predict whether the next change in interest rates would be up or down, citing volatile data and elevated trade-policy uncertainty, according to minutes published Tuesday.
Central bank officials kept their main interest rate unchanged at 2.25% on Dec. 10, saying it was at the right level to keep inflation near 2% and offer support to growth. The minutes, which summarize deliberations ahead of the policy announcement, indicate officials were somewhat leery of data showing improvements in economic activity, and cognizant of the elevated risk posed by trade-policy uncertainty on business investment and hiring.
After agreeing to hold the policy rate steady, senior officials "discussed whether it was more likely that their next move would be to raise or lower the policy interest rate," according to the minutes. Given a high level of uncertainty, "it was difficult to predict when and in which direction the next change in the policy rate would be," the minutes said.
Most economists predict that Canada's central bank will be on a prolonged pause in regards to rate policy, after a series of cuts starting in June of last year that lowered the policy rate by a collective 2.75 percentage points. In late November, fixed-income traders started to place bets of a policy-rate increase in the second half of 2026, based on encouraging economic data.
In announcing the Dec. 10 rate decision. Gov. Tiff Macklem attempted to temper expectations by arguing the economy wasn't close to reaching full potential.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
12-23-25 1352ET
