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Governor of the Bank of Canada Tiff Macklem holds a press conference at the Bank of Canada in Ottawa on Oct. 29.Sean Kilpatrick/The Canadian Press
12/10/25 07:00
Bank of Canada expected to hold key rate steady at 2.25%
– Mark Rendell
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The Bank of Canada is widely expected to hold its policy interest rate steady at 2.25 per cent today.Justin Tang/The Canadian Press
The Bank of Canada is widely expected to hold its policy interest rate steady at 2.25 per cent today, moving back to the sidelines for what financial markets expect to be an extended pause.
After cutting its benchmark rate by a quarter–percentage-point in October, Governor Tiff Macklem said that would likely be the bank’s last cut in an easing cycle that has seen it lower interest rates nine times since the summer of 2024.
Financial markets now believe the central bank will remain on hold through the first half of next year, with the next move more likely to be a hike rather than a cut, according to Bloomberg data.
The bank will be making its decision today based on a raft of better-than-expected data, which suggest the Canadian economy has weathered U.S. tariffs surprisingly well in recent months, and may not require further monetary policy stimulus.
Canada added 54,000 jobs in November, bringing the cumulative increase in jobs for September through November to 181,000. The unemployment rate fell to 6.5 per cent from 6.9 per cent the month before.
Gross domestic product grew an annualized 2.6 per cent in the third quarter after a contraction in the second. Some of this headline growth was the result of a quirk in the trade data. But it still exceeded Bay Street and Bank of Canada estimates and was accompanied by sizable upward revisions to GDP growth numbers for each of the past three years.
Meanwhile, inflation – the bank’s principal focus – remains several notches above the 2-per-cent target. Annual consumer price index inflation clocked in at 2.2 per cent in October, while measures of core inflation remain around 3 per cent.
After the decision in October, Mr. Macklem did not rule out further cuts if the Canadian economy takes a nosedive. But he said there would have to be a “material” change in the bank’s economic outlook to warrant additional easing.
Read more about today’s expected Bank of Canada decision.
