BoC's Macklem: Canadian dollar weakness has not been a major factor in rate decisions

BoC's Gov. Macklem: Signs that the economy is expanding are clearer. BoC's Gov. Macklem: Exports adjusting to US tariffs and growing. BoC's Gov. Macklem: Q2 is looking pretty solid, will be assessing how sustainable the pickup is. BoC's Gov. Macklem: If oil prices do once again rise and feed into inflation, I expect to need consecutive rate hikes to keep inflation under control. BoC's Gov. Macklem: We're going to take our decisions one at a time.

The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. Canada’s economy is showing signs of improvement. Growth is picking up and inflation is projected to ease gradually from its recent spike. There are still important risks and uncertainties related to the war in the Middle East and US trade policy. Since the April Monetary Policy Report (MPR), global economic prospects have been dented by higher oil prices stemming from the Middle East conflict. At the same time, the build-out of artificial intelligence (AI) is supporting economic activity in a growing number of countries. Oil prices are still lower than their peak in April but the situation in the Middle East remains volatile. The path for global inflation is highly dependent on how the conflict unfolds. The US economy is growing at about 2½%, mostly because of strong consumption and booming AI investment. China’s economy is expanding solidly thanks to robust exports. Economic activity in the euro area has been weighed down by high energy prices, but is expected to strengthen in the second half of the year if energy prices come down as anticipated. The Bank projects global GDP growth will slow to 2¾% in 2026, mostly because of the effects of the Middle East conflict, and recover to around 3¼% in 2027 and 2028. Bank of Canada Governor Macklem: Inflation is poised to ease gradually, provided global oil prices decline, prepared remarks show. BoC: Near-term inflation expectations are sensitive to changes in gasoline prices, but longer-term inflation expectations remain well anchored. Bank Of Canada drops reference to consecutive hikes. BOC ALSO DROPS REFERENCE TO CUT

On July 15, 2026, Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers answer questions from reporters following the policy rate decision and the release of the Monetary Policy Report.