{"id":664719,"date":"2026-03-18T15:35:18","date_gmt":"2026-03-18T15:35:18","guid":{"rendered":"https:\/\/www.europesays.com\/us\/664719\/"},"modified":"2026-03-18T15:35:18","modified_gmt":"2026-03-18T15:35:18","slug":"bank-of-canada-keeps-key-interest-rate-at-2-25-with-iran-war-and-cusma-in-sharp-focus","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/664719\/","title":{"rendered":"Bank of Canada keeps key interest rate at 2.25%, with Iran war and CUSMA in sharp focus"},"content":{"rendered":"<p>    <img fetchpriority=\"high\" decoding=\"async\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/afc05250-69e8-11ee-bdfb-47314a72b611.jpeg\" alt=\"Tiff Macklem, Governor of the Bank of Canada, speaks during a news conference after announcing the Monetary Policy Report, at the Bank of Canada auditorium in Ottawa, Ontario, Canada, on July 12, 2023. Canada's central bank raised its key interest rate by 25 basis points to five percent, its highest level since 2001. While the Bank of Canada acknowledged that global inflation was easing, it explained its decision -- which was in line with analyst expectations -- by saying: \" loading=\"eager\" height=\"640\" width=\"960\" class=\"yf-lglytj  loaded\"\/> Economists <a data-i13n=\"cpos:1;pos:1\" href=\"https:\/\/ca.finance.yahoo.com\/news\/boc-keep-rates-hold-despite-150809353.html\" data-ylk=\"slk:polled by Reuters;cpos:1;pos:1;elm:context_link;itc:0;sec:content-canvas;outcm:mb_qualified_link;_E:mb_qualified_link;ct:story;\" data-yga=\"{&quot;yLinkPosition&quot;:&quot;1&quot;,&quot;yLinkElement&quot;:&quot;context_link&quot;,&quot;yPosition&quot;:&quot;1&quot;,&quot;yModuleName&quot;:&quot;content-canvas&quot;,&quot;yLinkText&quot;:&quot;polled by Reuters&quot;,&quot;yHasCommerce&quot;:false}\" class=\"link  yahoo-link\" rel=\"nofollow noopener\" target=\"_blank\">polled by Reuters<\/a> were unanimous in their expectations for a hold today. (Photo by Dave Chan \/ AFP) (Photo by DAVE CHAN\/AFP via Getty Images)  \u00b7 DAVE CHAN via Getty Images    <\/p>\n<p class=\"yf-1fy9kyt\">The Bank of Canada (BoC) held its overnight interest rate steady at 2.25 per cent on Wednesday in a move widely expected by economists. The announcement comes as the central bank faces a daunting set of risks due to the war in Iran and ongoing uncertainty around the Canada\u2013U.S.\u2013Mexico Agreement.<\/p>\n<p class=\"yf-1fy9kyt\">In opening remarks published ahead of the news conference, Governor Tiff Macklem describes inflation as currently \u201ccontained\u201d \u2014 but notes that \u201cuncertainty is acute\u201d and the BoC\u2019s path is complex due to the Iran war and structural changes.<\/p>\n<p class=\"yf-1fy9kyt\">\u201cEconomic weakness combined with rising inflation is a dilemma for central banks,\u201d the remarks say. \u201cRaising interest rates to slow inflation could further weaken the economy. Easing interest rates to support growth risks pushing inflation well above target. Canada\u2019s outlook is further complicated by structural change\u2014shifting trade relationships, the adoption of AI, and changes in demographics.\u201d<\/p>\n<p class=\"yf-1fy9kyt\">The Bank also addressed how risks increase the longer the conflict in the Middle East continues. \u201cThe longer this conflict lasts and the wider it gets, the bigger the risks,\u201d the Governor\u2019s prepared remarks state. \u201cGoverning Council will look through the war\u2019s immediate impact on inflation but if energy prices stay high, we will not let their effects broaden and become persistent inflation.\u201d<\/p>\n<p class=\"yf-1fy9kyt\">Economists <a data-i13n=\"cpos:1;pos:1\" href=\"https:\/\/ca.finance.yahoo.com\/news\/boc-keep-rates-hold-despite-150809353.html\" data-ylk=\"slk:polled by Reuters;cpos:1;pos:1;elm:context_link;itc:0;sec:content-canvas;outcm:mb_qualified_link;_E:mb_qualified_link;ct:story;\" data-yga=\"{&quot;yLinkPosition&quot;:&quot;1&quot;,&quot;yLinkElement&quot;:&quot;context_link&quot;,&quot;yPosition&quot;:&quot;1&quot;,&quot;yModuleName&quot;:&quot;content-canvas&quot;,&quot;yLinkText&quot;:&quot;polled by Reuters&quot;,&quot;yHasCommerce&quot;:false}\" class=\"link  yahoo-link\" rel=\"nofollow noopener\" target=\"_blank\">polled by Reuters<\/a> were unanimous in their expectations for a hold today. In its <a data-i13n=\"cpos:2;pos:1\" href=\"https:\/\/ca.finance.yahoo.com\/news\/bank-of-canada-maintains-key-interest-rate-at-225-as-cusma-negotiations-loom-120033036.html\" data-ylk=\"slk:late January decision;cpos:2;pos:1;elm:context_link;itc:0;sec:content-canvas;outcm:mb_qualified_link;_E:mb_qualified_link;ct:story;\" data-yga=\"{&quot;yLinkPosition&quot;:&quot;2&quot;,&quot;yLinkElement&quot;:&quot;context_link&quot;,&quot;yPosition&quot;:&quot;1&quot;,&quot;yModuleName&quot;:&quot;content-canvas&quot;,&quot;yLinkText&quot;:&quot;late January decision&quot;,&quot;yHasCommerce&quot;:false}\" class=\"link  yahoo-link\" rel=\"nofollow noopener\" target=\"_blank\">late January decision<\/a> the Bank also held its policy rate stable.<\/p>\n<p class=\"yf-1fy9kyt\">Watch the press conference with Governor Macklem and Senior Deputy Governor Carolyn Rogers beginning at 10:30 a.m. ET.<\/p>\n<p class=\"yf-1fy9kyt\">Follow Yahoo Finance Canada\u2019s live blog for news, updates and analysis of the Bank of Canada\u2019s interest rate announcement below.<\/p>\n<p>LIVE 25 updates<\/p>\n<ul class=\"liveblog-list yf-1akp1w0\" data-testid=\"blog-posts\">\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"e4361b64-59e0-4de1-9de5-74a8c94f3ffe\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/da158580-4acd-11f0-bf7f-93c5d7d52cf6.jpeg\" alt=\"Leah Golob\"\/>   BoC sets sights on inflation amid manufacturing, housing turmoil\n<p class=\"yf-1fy9kyt\">Canada is currently reeling from different economic impacts, including the influence of tariffs on manufacturing, high housing prices and rising mortgage renewals, while higher oil prices will benefit energy-producing regions.<\/p>\n<p class=\"yf-1fy9kyt\">BoC Governor Tiff Macklem emphasized, however, that the central bank has one target: inflation for the whole country.<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;Our job is somewhat limited,&#8221; he added.<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;Our inflation target is our ultimate beacon.&#8221;<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"2ee7354a-aa8f-49e3-a71e-b60eb3bc7055\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/1773848117_372_dims.jpeg\" alt=\"Jeff Lagerquist\"\/>   War, weaker economy favour a &#8216;wait-and-see approach&#8217;: Monex Canada\n<p class=\"yf-1fy9kyt\">The fog of war and a potentially weaker Canadian economy will keep the BoC on the sidelines, according to foreign exchange firm Monex Canada.<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;On one side are the downside risks to growth stemming from domestic economic weakness which has become more pronounced since the start of the year. But this must now be weighed against upside inflation pressures resulting from conflict in the Middle East,&#8221; Nick Rees, Monex Canada&#8217;s head of macro research, wrote on Wednesday.<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;For now, that balancing act favours a wait-and-see approach, as we warned it would in our pre-event note. Still, that is arguably more dovish than markets had expected, with the loonie under pressure as a consequence.&#8221;<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"0b1bb5c3-c27e-4062-9267-eea62a65c759\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/1773848117_372_dims.jpeg\" alt=\"Jeff Lagerquist\"\/>   Bank of Canada is using more &#8216;high-frequency data&#8217;: Rogers\n<p class=\"yf-1fy9kyt\">BoC senior deputy governor Carolyn Rogers says the central bank is improving its use of &#8220;high-frequency&#8221; data to monitor the economic impact of fast-moving events like the war in Iran.<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;We&#8217;ve gotten better at using high-frequency data,&#8221; she told reporters on Wednesday.<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;That&#8217;ll help us detect this potential for prices to move from energy and other goods and services faster, and be able to react faster.&#8221;<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"5a44586a-9cfe-4827-852d-7675838c8636\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/1773848117_372_dims.jpeg\" alt=\"Jeff Lagerquist\"\/>   Bank of Canada to stay on hold through 2026: ATB Financial\n<p class=\"yf-1fy9kyt\">Facing a massive balance of uncertainty, the Bank of Canada will remain on hold through 2026. That&#8217;s according to ATB Financial economist Mark Parsons.<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;We maintain our view that the Bank of Canada will stay on hold this year,&#8221; he wrote on Wednesday.<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;The Bank is in a tricky spot,&#8221; Parsons added. &#8220;Keep in mind that even before the war, we weren\u2019t expecting the Bank of Canada to come to the economic rescue by cutting rates. Other policy levers outside its control, like accelerating major projects, will need to be pulled.&#8221;<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"6e427eaa-3ef4-4b32-92f4-6f115c70dfa0\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/1773848117_372_dims.jpeg\" alt=\"Jeff Lagerquist\"\/>   A Middle East war beyond two quarters would support case for rate hikes: Vanguard Canada\n<p class=\"yf-1fy9kyt\">With no end in sight to the U.S.-Israel war against Iran, Vanguard Canada says the BoC could stray from the investment giant&#8217;s base case for a policy rate hold through 2026.<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;If the Middle East conflict were to become protracted and persist for more than two quarters, the Bank of Canada would likely become more inclined to hike rates, as headline inflation could rise by roughly 75 basis points and core inflation by about 30 basis points,&#8221; investment strategist Ashish Dewan stated following Wednesday&#8217;s rate decision.<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;The longer this conflict goes on, there is more potential for wider implications,&#8221; BoC Governor Tiff Macklem told reporters in Ottawa on Wednesday.<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;Oil and natural gas are not the only commodities that go through the Strait of Hormuz,&#8221; he added. &#8220;Other petrochemical commodities, fertilizers, in particular, go through it, you know, if they&#8217;re blocked, that will have other global impacts.&#8221;<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"93e9ed3c-c8ea-4732-aeeb-3b9f6a59f70a\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/1773848117_372_dims.jpeg\" alt=\"Jeff Lagerquist\"\/>   No clear debate on cuts or hikes, as &#8216;unknowable&#8217; factors loom: CIBC\n<p class=\"yf-1fy9kyt\">CIBC chief economist Avery Shenfeld says it&#8217;s clear from Wednesday&#8217;s BoC rate decision that policymakers gave little thought to either a cut or a hike today.<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;It gave no indication that there was any debate on either cutting or hiking at this point, in line with its perspective that the implications of the energy price shock will depend critically on how long it persists, which simply is unknowable at this point,&#8221; he wrote on Wednesday.<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"edd40e90-c924-48f3-ba7e-3a4c19229e68\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/1773848117_372_dims.jpeg\" alt=\"Jeff Lagerquist\"\/>   BoC to downplay soaring oil influence on rate path: Corpay\n<p class=\"yf-1fy9kyt\">Bank of Canada Governor Tiff Macklem acknowledged the dual economic impacts of soaring oil prices on Wednesday \u2014 a squeeze for consumers, and a boost to energy exports.<\/p>\n<p class=\"yf-1fy9kyt\">However, Karl Schamotta, chief market strategist at Corpay, says the Bank may ultimately downplay this factor when it comes to deciding the path forward for its key rate.<\/p>\n<p class=\"yf-1fy9kyt\">On Wednesday, Macklem said it&#8217;s \u201ctoo early to assess the impact of the (Iran) war on growth in Canada.\u201d<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"ccfe222f-2b58-4f31-b6bd-cfb8a9c00e32\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/da158580-4acd-11f0-bf7f-93c5d7d52cf6.jpeg\" alt=\"Leah Golob\"\/>   Rate hold gives variable-rate borrowers breathing room, but risks still loom\n<p class=\"yf-1fy9kyt\">The Bank of Canada\u2019s rate hold means borrowing costs will remain unchanged, making variable-rate mortgages a tempting option for homebuyers.<\/p>\n<p class=\"yf-1fy9kyt\">\u201cToday\u2019s rate means variable mortgage holders won\u2019t see any immediate change to their payments,\u201d said Leah Zlakin, licensed mortgage broker and <a data-i13n=\"cpos:1;pos:1\" href=\"http:\/\/lowestrates.ca\/\" rel=\"nofollow noopener\" target=\"_blank\" data-ylk=\"slk:LowestRates.ca;cpos:1;pos:1;elm:context_link;itc:0;sec:content-canvas\" data-yga=\"{&quot;yLinkPosition&quot;:&quot;1&quot;,&quot;yLinkElement&quot;:&quot;context_link&quot;,&quot;yPosition&quot;:&quot;1&quot;,&quot;yModuleName&quot;:&quot;content-canvas&quot;,&quot;yLinkText&quot;:&quot;LowestRates.ca&quot;,&quot;yHasCommerce&quot;:false}\" class=\"link \">LowestRates.ca<\/a> expert. \u201cThat gives homeowners and buyers a bit more stability as they plan their next steps, whether they\u2019re renewing a mortgage or considering entering the market.\u201d<\/p>\n<p class=\"yf-1fy9kyt\">Five-year fixed mortgage rates are currently about 0.35 percentage points higher than variable rates for insured borrowers and about 0.24 percentage points higher for uninsurable borrowers, she adds.<\/p>\n<p class=\"yf-1fy9kyt\">While variable rates can be cheaper than fixed rates now, borrowers should consider that rates could rise in the future, she says.<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"3b9a3cd8-7f17-4f91-9a56-d4dc4e8f804f\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/1773848117_372_dims.jpeg\" alt=\"Jeff Lagerquist\"\/>   Housing market pressure to persist as BoC holds rates: Rates.ca\n<p class=\"yf-1fy9kyt\">Slow demand in Canada&#8217;s housing market is set to continue as the BoC held its key lending rate today, according to an expert from financial product comparison website Rates.ca.<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;Today\u2019s rate hold isn\u2019t likely to move the needle on the housing market in any significant way,\u201d mortgage and real estate expert Victor Tran stated following the decision.<\/p>\n<p class=\"yf-1fy9kyt\">\u201cWhile the hold means stability for variable mortgage rates, fixed mortgage rates are on the rise, which will affect renewals this year,&#8221; he added. &#8220;The prospect of higher mortgage rates coupled with economic uncertainty and the ongoing affordability crisis are likely to put downward pressure on the housing market.&#8221;<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"b7ebeeda-6f20-4619-932d-528eb5481f18\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/1773848117_372_dims.jpeg\" alt=\"Jeff Lagerquist\"\/>   Key takeaways from Macklem&#8217;s prepared opening statement to be delivered at 10:30 a.m. ET\n<p class=\"yf-1fy9kyt\">The Bank of Canada released prepared remarks to be delivered by Governor Tiff Macklem at the Bank&#8217;s live press conference at 10:30 a.m. ET today.<\/p>\n<p class=\"yf-1fy9kyt\">Here are some of the highlights:<\/p>\n<p class=\"yf-1fy9kyt\"><strong>On the U.S.-Israel war in Iran, and soaring energy prices:<\/strong><\/p>\n<p class=\"yf-1fy9kyt\">&#8220;The war in Iran has added a new layer of uncertainty. Its impact on the global and Canadian economies will depend on how long the conflict lasts and the extent to which it spreads across the Middle East.&#8221;<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;The longer this conflict lasts and the wider it gets, the bigger the risks. Governing Council will look through the war\u2019s immediate impact on inflation but if energy prices stay high, we will not let their effects broaden and become persistent inflation.&#8221;<\/p>\n<p class=\"yf-1fy9kyt\"><strong>On inflation:<\/strong><\/p>\n<p class=\"yf-1fy9kyt\">&#8220;Inflation in Canada has been close to the 2% target for more than a year.&#8221;<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;The recent sharp increase in global energy prices is causing higher prices at the pump, which will push up inflation in the coming months.&#8221;<\/p>\n<p class=\"yf-1fy9kyt\"><strong>On the Canada-U.S trade war:<\/strong><\/p>\n<p class=\"yf-1fy9kyt\">&#8220;We are continuing to assess the impact of US tariffs and trade policy uncertainty, and how the Canadian economy is adjusting.&#8221;<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;Canada\u2019s outlook is further complicated by structural change\u2014shifting trade relationships, the adoption of AI, and changes in demographics.&#8221;<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"c6fc087a-e36b-44f8-8439-bee1fa3be071\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/fd877bf0-d5ac-11ee-bd5b-2c8033f1b432.jpeg\" alt=\"John MacFarlane \"\/>   Price stability emphasized\n<p class=\"yf-1fy9kyt\">The last word in the BoC&#8217;s statement is about inflation, with little change in language from the previous rate announcement:<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;As the outlook evolves, we stand ready to respond as needed. The Bank is committed to ensuring that Canadians continue to have confidence in price stability through this period of global upheaval.&#8221;<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"5574450e-b3cc-4ff1-abf1-9b278a212a3f\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/fd877bf0-d5ac-11ee-bd5b-2c8033f1b432.jpeg\" alt=\"John MacFarlane \"\/>   Iran war impact on economy &#8216;highly uncertain&#8217;\n<p class=\"yf-1fy9kyt\">&#8220;The war in the Middle East has increased volatility in global energy prices and financial markets, and heightened the risks to the global economy,&#8221; the BoC announcement says. &#8220;The breadth and duration of the conflict, and hence its economic impacts, are highly uncertain.&#8221;<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"096f7a40-b782-4e59-9dab-d92e81ceb6ee\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/fd877bf0-d5ac-11ee-bd5b-2c8033f1b432.jpeg\" alt=\"John MacFarlane \"\/>   Downside risks to economy, upside inflation risks due to oil: BoC\n<p class=\"yf-1fy9kyt\">&#8220;With recent data pointing to weaker economic activity and uncertainty elevated, risks to growth look tilted to the downside,&#8221; the BoC&#8217;s rate announcement says. &#8220;At the same time, inflation risks have gone up due to higher energy prices. We will continue to assess the impact of US tariffs and trade policy uncertainty, and how the Canadian economy is adjusting.&#8221;<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"50d50646-8025-4536-82eb-9bef8ec9b1fc\" data-testid=\"blog-post\"> BANK OF CANADA MAINTAINS POLICY RATE AT 2.25 PER CENT IN THIRD CONSECUTIVE RATE HOLD   <\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"386c9b99-658e-445e-922b-911d337f148f\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/fd877bf0-d5ac-11ee-bd5b-2c8033f1b432.jpeg\" alt=\"John MacFarlane \"\/>   The numbers behind today&#8217;s BoC decision\n<p class=\"yf-1fy9kyt\">Here are the latest data the Bank of Canada has to guide its interest rate decision this morning.<\/p>\n<p class=\"yf-1fy9kyt\"><a data-i13n=\"cpos:1;pos:1\" href=\"https:\/\/ca.finance.yahoo.com\/news\/canada-inflation-slows-to-18-in-february-in-calm-before-the-storm-ahead-of-oil-shock-123455609.html\" data-ylk=\"slk:Inflation cooled;cpos:1;pos:1;elm:context_link;itc:0;sec:content-canvas;outcm:mb_qualified_link;_E:mb_qualified_link;ct:story;\" data-yga=\"{&quot;yLinkPosition&quot;:&quot;1&quot;,&quot;yLinkElement&quot;:&quot;context_link&quot;,&quot;yPosition&quot;:&quot;1&quot;,&quot;yModuleName&quot;:&quot;content-canvas&quot;,&quot;yLinkText&quot;:&quot;Inflation cooled&quot;,&quot;yHasCommerce&quot;:false}\" class=\"link  yahoo-link\" rel=\"nofollow noopener\" target=\"_blank\"><strong>Inflation cooled<\/strong><\/a><strong> in Canada last month, but the data mostly cover a time before the Iran war. Economists expect inflation figures to spike alongside elevated oil prices, but generally agree that the \u201ctame\u201d data in February \u2014 including still-slowing core inflation measures \u2014 will allow the BoC to keep rates steady.<\/strong><\/p>\n<p class=\"yf-1fy9kyt\"><strong>Canada&#8217;s February <\/strong><strong>Labour Force Survey<\/strong><strong> was \u201csimply brutal,\u201d in the words of BMO chief economist Douglas Porter. The job market <\/strong><a data-i13n=\"cpos:2;pos:1\" href=\"https:\/\/ca.finance.yahoo.com\/news\/simply-brutal-canada-lost-84k-jobs-in-february-unemployment-rises-to-67-123843924.html\" data-ylk=\"slk:lost a net 83,900 jobs;cpos:2;pos:1;elm:context_link;itc:0;sec:content-canvas;outcm:mb_qualified_link;_E:mb_qualified_link;ct:story;\" data-yga=\"{&quot;yLinkPosition&quot;:&quot;2&quot;,&quot;yLinkElement&quot;:&quot;context_link&quot;,&quot;yPosition&quot;:&quot;1&quot;,&quot;yModuleName&quot;:&quot;content-canvas&quot;,&quot;yLinkText&quot;:&quot;lost a net 83,900 jobs&quot;,&quot;yHasCommerce&quot;:false}\" class=\"link  yahoo-link\" rel=\"nofollow noopener\" target=\"_blank\"><strong>lost a net 83,900 jobs<\/strong><\/a><strong> and the unemployment rate rose to 6.7 per cent.<\/strong><\/p>\n<p class=\"yf-1fy9kyt\"><strong>Canada\u2019s economy <\/strong><a data-i13n=\"cpos:3;pos:1\" href=\"https:\/\/ca.finance.yahoo.com\/news\/canadas-economy-shrank-more-than-expected-to-close-out-2025-as-businesses-ate-into-existing-inventories-134056095.html\" data-ylk=\"slk:shrank by an annualized 0.6 per cent;cpos:3;pos:1;elm:context_link;itc:0;sec:content-canvas;outcm:mb_qualified_link;_E:mb_qualified_link;ct:story;\" data-yga=\"{&quot;yLinkPosition&quot;:&quot;3&quot;,&quot;yLinkElement&quot;:&quot;context_link&quot;,&quot;yPosition&quot;:&quot;1&quot;,&quot;yModuleName&quot;:&quot;content-canvas&quot;,&quot;yLinkText&quot;:&quot;shrank by an annualized 0.6 per cent&quot;,&quot;yHasCommerce&quot;:false}\" class=\"link  yahoo-link\" rel=\"nofollow noopener\" target=\"_blank\"><strong>shrank by an annualized 0.6 per cent<\/strong><\/a><strong> in the final quarter of 2025, though economists say that overall number is masking other positive signs. Consumer spending picked up, and the headline slowdown was caused by businesses selling off existing inventory, not a lack of demand.<\/strong><\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"084a907a-c83b-45d0-b902-55998707a60d\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/fd877bf0-d5ac-11ee-bd5b-2c8033f1b432.jpeg\" alt=\"John MacFarlane \"\/>   Don\u2019t expect BoC to say much about oil shock: Scotia economist Holt    <img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" alt=\"ALBERTA, CANADA  MAY 22:&#10;An oil well in a field seen along Highway 22, known as the Cowboy Trail, between Cochrane and Cremona, in Alberta, Canada on May 22, 2025. (Photo by Artur Widak\/NurPhoto via Getty Images)\" loading=\"lazy\" height=\"427\" width=\"640\" class=\"yf-lglytj loader\"\/> An oil well along a highway between Cochrane and Cremona, in Alberta. (Photo by Artur Widak\/NurPhoto via Getty Images)  \u00b7 NurPhoto via Getty Images\n<p class=\"yf-1fy9kyt\">Scotiabank economist Derek Holt doesn\u2019t expect much commentary from the BoC today on the oil shock. In a morning note to clients, Holt suggests that Macklem and senior deputy governor Carolyn Rogers will maintain that it would be \u201cpremature\u201d to weigh in, \u201cat least until they issue updated projections next month\u201d \u2014 meaning the next quarterly Monetary Policy Report in April.<\/p>\n<p class=\"yf-1fy9kyt\">\u201cThe BoC is slow footed and in this case perhaps for good reasons as it will wish to monitor the magnitude and permanence of the energy shock and how it impacts Canada\u2019s economy, inflation, and monetary policy,\u201d Holt says. He notes that when oil prices plummeted in 2014\u201315, BoC statements were conspicuously free of the words \u201coil\u201d and &#8220;energy,&#8221; until then-governor Stephen Poloz \u201cwaltzed in and delivered a sudden cut that caught many off guard.\u201d<\/p>\n<p class=\"yf-1fy9kyt\">If Macklem were to suggest overtly today that \u201can energy shock is typically favourable to Canada and can stoke inflationary pressures,\u201d Holt says, markets would very quickly price in interest rate hikes. The more likely approach if the energy shock is prolonged, Holt argues, would be similar to 2014\u201315, with minimal commentary until the Bank moves to adjust.<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"f0c26aac-47f5-4d02-8b85-7a97e54b9918\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/da158580-4acd-11f0-bf7f-93c5d7d52cf6.jpeg\" alt=\"Leah Golob\"\/>   Powell likely to signal pause as oil prices complicate Fed\u2019s next move\n<p class=\"yf-1fy9kyt\">The Federal Reserve is expected to leave <a data-i13n=\"cpos:1;pos:1\" href=\"https:\/\/ca.finance.yahoo.com\/news\/fed-meeting-live-updates-federal-reserve-expected-to-hold-rates-steady-offer-updated-outlook-amid-iran-war-125458502.html\" data-ylk=\"slk:interest rates unchanged;cpos:1;pos:1;elm:context_link;itc:0;sec:content-canvas;outcm:mb_qualified_link;_E:mb_qualified_link;ct:story;\" data-yga=\"{&quot;yLinkPosition&quot;:&quot;1&quot;,&quot;yLinkElement&quot;:&quot;context_link&quot;,&quot;yPosition&quot;:&quot;1&quot;,&quot;yModuleName&quot;:&quot;content-canvas&quot;,&quot;yLinkText&quot;:&quot;interest rates unchanged&quot;,&quot;yHasCommerce&quot;:false}\" class=\"link  yahoo-link\" rel=\"nofollow noopener\" target=\"_blank\">interest rates unchanged<\/a> at the conclusion of its two-day policy meeting on Wednesday, keeping them in the 3.5 per cent to 3.75 per cent range.<\/p>\n<p class=\"yf-1fy9kyt\">Fed Chair Jerome Powell is expected to announce the central bank will remain on hold to assess the oil shock during his press conference at 2:30 p.m. ET today.<\/p>\n<p class=\"yf-1fy9kyt\">The recent jump in oil prices tied to the Middle East conflict has muddied the Federal Reserve&#8217;s outlook, even as inflation remains above its two per cent target and the <a data-i13n=\"cpos:2;pos:1\" href=\"https:\/\/ca.finance.yahoo.com\/news\/weak-jobs-report-likely-to-keep-fed-on-hold-in-wake-of-oil-price-shock-170039427.html\" data-ylk=\"slk:employment rate ticked up to 4.4 per cent;cpos:2;pos:1;elm:context_link;itc:0;sec:content-canvas;outcm:mb_qualified_link;_E:mb_qualified_link;ct:story;\" data-yga=\"{&quot;yLinkPosition&quot;:&quot;2&quot;,&quot;yLinkElement&quot;:&quot;context_link&quot;,&quot;yPosition&quot;:&quot;1&quot;,&quot;yModuleName&quot;:&quot;content-canvas&quot;,&quot;yLinkText&quot;:&quot;employment rate ticked up to 4.4 per cent&quot;,&quot;yHasCommerce&quot;:false}\" class=\"link  yahoo-link\" rel=\"nofollow noopener\" target=\"_blank\">employment rate ticked up to 4.4 per cent<\/a>. If the rise in gas prices doesn\u2019t relent in the near-term, it could <a data-i13n=\"cpos:3;pos:1\" href=\"https:\/\/ca.finance.yahoo.com\/news\/federal-could-signal-no-interest-040552043.html\" data-ylk=\"slk:slow the economy;cpos:3;pos:1;elm:context_link;itc:0;sec:content-canvas;outcm:mb_qualified_link;_E:mb_qualified_link;ct:story;\" data-yga=\"{&quot;yLinkPosition&quot;:&quot;3&quot;,&quot;yLinkElement&quot;:&quot;context_link&quot;,&quot;yPosition&quot;:&quot;1&quot;,&quot;yModuleName&quot;:&quot;content-canvas&quot;,&quot;yLinkText&quot;:&quot;slow the economy&quot;,&quot;yHasCommerce&quot;:false}\" class=\"link  yahoo-link\" rel=\"nofollow noopener\" target=\"_blank\">slow the economy<\/a> by leaving consumers with less money for goods and services.<\/p>\n<p class=\"yf-1fy9kyt\">On Monday, U.S. President Trump told reporters Monday that the Fed should hold a \u201cspecial meeting\u201d to <a data-i13n=\"cpos:4;pos:1\" href=\"https:\/\/ca.finance.yahoo.com\/news\/trump-says-fed-hold-meeting-163802922.html\" data-ylk=\"slk:cut interest rates;cpos:4;pos:1;elm:context_link;itc:0;sec:content-canvas;outcm:mb_qualified_link;_E:mb_qualified_link;ct:story;\" data-yga=\"{&quot;yLinkPosition&quot;:&quot;4&quot;,&quot;yLinkElement&quot;:&quot;context_link&quot;,&quot;yPosition&quot;:&quot;1&quot;,&quot;yModuleName&quot;:&quot;content-canvas&quot;,&quot;yLinkText&quot;:&quot;cut interest rates&quot;,&quot;yHasCommerce&quot;:false}\" class=\"link  yahoo-link\" rel=\"nofollow noopener\" target=\"_blank\">cut interest rates<\/a> \u201cright now.\u201d<\/p>\n<p class=\"yf-1fy9kyt\">Traders now predict the Fed won\u2019t slash rates until October or December.<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"2bcaac73-994b-4970-a774-2e4569885817\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/1773848117_372_dims.jpeg\" alt=\"Jeff Lagerquist\"\/>   &#8216;Tug-of-war&#8217; for the loonie raises uncertainty for BoC policymakers\n<p class=\"yf-1fy9kyt\">Currency volatility has been on the list of fresh uncertainties for the Bank of Canada since its January meeting.<\/p>\n<p class=\"yf-1fy9kyt\">War in the Middle East has lifted the Canadian dollar against global currencies like the Euro and Yen, as investors seek a perceived safe haven that typically benefits from rising oil prices.<\/p>\n<p class=\"yf-1fy9kyt\">However, that same risk-off sentiment has also lifted America\u2019s greenback. The U.S. dollar has outperformed the loonie thanks in part to weak Canadian jobs data, and expectations of a Federal Reserve rate cut later in the year.<\/p>\n<p class=\"yf-1fy9kyt\">\u201cOil prices are providing support, helping the CAD outperform many other major currencies during this latest wave of geopolitical tension,\u201d FX analysts at Toronto-based currency exchange Interchange Financial wrote in a recent research note. \u201cThe strength of the U.S. dollar is preventing a stronger rally.\u201d<\/p>\n<p class=\"yf-1fy9kyt\">\u201cThe result is a tug-of-war between two powerful forces,\u201d they added. \u201cThe jump in oil prices is also changing expectations around inflation and central bank policy.\u201d<\/p>\n<p class=\"yf-1fy9kyt\">On Monday, BMO senior economist Sal Guatieri called for the Canadian dollar to end the year at US$0.75, <a data-i13n=\"cpos:1;pos:1\" href=\"https:\/\/ca.finance.yahoo.com\/news\/canadian-dollar-to-reclaim-the-us-75-cent-mark-by-year-end-analysts-say-164536384.html\" data-ylk=\"slk:echoing prior estimates from TD Bank and CIBC;cpos:1;pos:1;elm:context_link;itc:0;sec:content-canvas;outcm:mb_qualified_link;_E:mb_qualified_link;ct:story;\" data-yga=\"{&quot;yLinkPosition&quot;:&quot;1&quot;,&quot;yLinkElement&quot;:&quot;context_link&quot;,&quot;yPosition&quot;:&quot;1&quot;,&quot;yModuleName&quot;:&quot;content-canvas&quot;,&quot;yLinkText&quot;:&quot;echoing prior estimates from TD Bank and CIBC&quot;,&quot;yHasCommerce&quot;:false}\" class=\"link  yahoo-link\" rel=\"nofollow noopener\" target=\"_blank\">echoing prior estimates from TD Bank and CIBC<\/a>.<\/p>\n<p class=\"yf-1fy9kyt\">Like most of his peers, Guatieri expects Canada\u2019s central bank to hold its policy rate today.<\/p>\n<p class=\"yf-1fy9kyt\">\u201cWe see no change in the current 2.25 per cent policy rate this year or next,\u201d he wrote on March 16.\u201cMeantime, assuming the Fed pulls the easing trigger again, narrower interest-rate spreads with the U.S. could lift the Canadian dollar to US$0.75 by year-end.\u201d<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"96eda215-d48c-480a-81a0-c50f428d1a75\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/fd877bf0-d5ac-11ee-bd5b-2c8033f1b432.jpeg\" alt=\"John MacFarlane \"\/>   Canada&#8217;s housing market in a &#8216;stalemate,&#8217; and likely to remain there    <img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" alt=\"EDMONTON, CANADA  MARCH 29:&#10;A 'For Sale' sign is displayed in Central Edmonton, Alberta, Canada, on March 29, 2025. (Photo by Artur Widak\/NurPhoto via Getty Images)\" loading=\"lazy\" height=\"427\" width=\"640\" class=\"yf-lglytj loader\"\/> Although typical spring buyers might be looking for rate relief, escalating energy prices make the BoC&#8217;s calculus that much harder. (Photo by Artur Widak\/NurPhoto via Getty Images)  \u00b7 NurPhoto via Getty Images\n<p class=\"yf-1fy9kyt\">The story for Canada&#8217;s frozen housing market isn\u2019t just about today&#8217;s widely expected BoC hold; it\u2019s also about the layers of uncertain outcomes for Canada&#8217;s economy keeping many on the sidelines.<\/p>\n<p class=\"yf-1fy9kyt\">Between the inflationary shock of the war in Iran, the looming CUSMA review, and inconsistent signals from the job market, experts say Canada\u2019s housing market is <a data-i13n=\"cpos:1;pos:1\" href=\"https:\/\/ca.finance.yahoo.com\/news\/iran-cusma-what-they-mean-for-the-bank-of-canada-and-the-housing-market-112116515.html\" data-ylk=\"slk:likely to remain in a &quot;stalemate.&quot;;cpos:1;pos:1;elm:context_link;itc:0;sec:content-canvas;outcm:mb_qualified_link;_E:mb_qualified_link;ct:story;\" data-yga=\"{&quot;yLinkPosition&quot;:&quot;1&quot;,&quot;yLinkElement&quot;:&quot;context_link&quot;,&quot;yPosition&quot;:&quot;1&quot;,&quot;yModuleName&quot;:&quot;content-canvas&quot;,&quot;yLinkText&quot;:&quot;likely to remain in a \\&quot;stalemate.\\&quot;&quot;,&quot;yHasCommerce&quot;:false}\" class=\"link  yahoo-link\" rel=\"nofollow noopener\" target=\"_blank\">likely to remain in a &#8220;stalemate.&#8221;<\/a><\/p>\n<p class=\"yf-1fy9kyt\">The Middle East crisis has caused fixed mortgage rates to decouple from the BoC&#8217;s policy path, leaving many Canadians to weigh a high-stakes gamble on variable rates, which currently sit much lower. And while typical spring buyers might be looking for rate relief, escalating energy prices make the BoC&#8217;s calculus that much harder.<\/p>\n<p class=\"yf-1fy9kyt\">Desjardins Group economist Randall Bartlett says it wouldn\u2019t be unreasonable for the BoC to \u201crevert to providing alternative scenarios\u201d for its economic outlook \u2014 a reference to the central bank\u2019s decision to abandon a single base case last year due to U.S. trade policy \u2014 \u201cbecause it is so uncertain and it is so challenging in this environment.\u201d<\/p>\n<\/li>\n<li class=\"caas-liveblogpost yf-g1zpqf\" id=\"eae3f64d-c293-4fbd-a693-84f9ae1d462f\" data-testid=\"blog-post\"><img decoding=\"async\" class=\"avatar yf-g1zpqf\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/03\/da158580-4acd-11f0-bf7f-93c5d7d52cf6.jpeg\" alt=\"Leah Golob\"\/>   Canadians filing for insolvency carry record $67,496 in debt: Study\n<p class=\"yf-1fy9kyt\">Canadians drowning in debt are entering insolvency with <a data-i13n=\"cpos:1;pos:1\" href=\"https:\/\/ca.finance.yahoo.com\/news\/insolvent-canadians-leaning-on-credit-longer-piling-up-record-debt-report-190057357.html\" data-ylk=\"slk:record levels of outstanding balances;cpos:1;pos:1;elm:context_link;itc:0;sec:content-canvas;outcm:mb_qualified_link;_E:mb_qualified_link;ct:story;\" data-yga=\"{&quot;yLinkPosition&quot;:&quot;1&quot;,&quot;yLinkElement&quot;:&quot;context_link&quot;,&quot;yPosition&quot;:&quot;1&quot;,&quot;yModuleName&quot;:&quot;content-canvas&quot;,&quot;yLinkText&quot;:&quot;record levels of outstanding balances&quot;,&quot;yHasCommerce&quot;:false}\" class=\"link  yahoo-link\" rel=\"nofollow noopener\" target=\"_blank\">record levels of outstanding balances<\/a>, according to a study by insolvency firm Hoyes, Michalos &amp; Associates.<\/p>\n<p class=\"yf-1fy9kyt\">The average insolvent debtor owed $67,496 in unsecured debt in 2025, the highest level reported since the study began in 2011.<\/p>\n<p class=\"yf-1fy9kyt\">In Canada, insolvency is more common among renters than homeowners. Homeowners accounted for eight per cent of all insolvencies last year, up from five per cent a year earlier.<\/p>\n<p class=\"yf-1fy9kyt\">\u201cThis isn\u2019t about one bad financial decision or a sudden crisis,\u201d said Doug Hoyes, a licensed insolvency trustee and co-founder of the firm.<\/p>\n<p class=\"yf-1fy9kyt\">\u201cCanadians are layering borrowing on top of borrowing, leading to insolvencies with unprecedented debt levels.\u201d<\/p>\n<p class=\"yf-1fy9kyt\">The average Canadian filing for insolvency owed money to about 10 lenders or organizations, the study says.They were also juggling an average of 3.5 credit cards each, up 13.3 per cent from a year earlier.<\/p>\n<\/li>\n<\/ul>\n<p class=\"yf-1fy9kyt\">Correction: Due to a reporting error, a previous version of this story misstated the odds of a December hike from LSEG. It is at 73.2 per cent.<\/p>\n","protected":false},"excerpt":{"rendered":"Economists polled by Reuters were unanimous in their expectations for a hold today. (Photo by Dave Chan \/&hellip;\n","protected":false},"author":3,"featured_media":664720,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[12],"tags":[2440,64,281248,79,1936,281249,151215,67,132,68],"class_list":["post-664719","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-bank-of-canada","tag-business","tag-dave-chan","tag-economy","tag-getty-images","tag-overnight-interest-rate","tag-tiff-macklem","tag-united-states","tag-unitedstates","tag-us"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/116250918240996808","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/664719","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=664719"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/664719\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/664720"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=664719"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=664719"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=664719"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}