Bank of Canada keeps rates on hold as expected

(Sharecast News) - The Bank of Canada kept interest rates at 2.25% on Wednesday, as widely expected, for the seventh meeting in a row. BoC governor Tiff Macklem said: "Since our last decision in July, the conflict in the Middle East has persisted without a clear path to resolution. Closer to home, the United States has imposed new tariffs on Canadian exports, and the Canadian government has responded with proportionate counter-tariffs and new supports for hard-hit businesses and workers.

"Against this background, the Governing Council assessed the economic data since our last decision, the evolving risks to the outlook, and the implications for monetary policy.

"With recent data coming out largely in line with our July forecast, we decided to maintain the policy interest rate at 2.25%."

TD Securities said the BoC struck a more hawkish tone in September with an emphasis on upside risks to inflation after the rebound in second-quarter GDP and employment.

"The Bank noted that renewed trade tensions pose a risk to this recovery but downplayed direct tariff impacts in the statement. We still believe that excess supply leaves a longer runway for hikes and look for the Bank to stay on hold through 2026," it said.