Bank of Canada Maintains Steady Course Amid Inflation Easing

The Bank of Canada has kept its benchmark overnight rate at 2.25% to support economic growth as inflation pressures ease. The central bank is optimistic about growth strengthening in the latter half of the year, albeit with slight modifications to its future growth and inflation forecasts.

The Bank of Canada decided to leave its benchmark overnight interest rate unchanged at 2.25% on Wednesday, aligning with widespread expectations. The central bank indicated that economic growth is set to strengthen in the year's second half as inflationary pressures subside.

This decision continues a trend, marking the sixth consecutive time the bank has maintained its key policy rate following an aggressive series of cuts last year, which lowered the rate to its current level in October.

Optimism is evident as the bank adjusted its growth forecasts for 2027 and 2028, while the 2026 outlook was slightly lowered. Inflation is anticipated to stay within the 1%-3% range, with a 2026 forecast increase to 2.5%.