OTTAWA – September 3, 2026 – The Bank of Canada held its key interest rate at 2.25 per cent on Wednesday, warning that inflation risks are rising even as the trade conflict with the United States clouds the economic outlook.
Governor Tiff Macklem said the ongoing Middle East conflict has increased upside risks to inflation through higher energy prices, while new U.S. tariffs have made growth prospects more uncertain. Markets raised bets on a rate hike later this year after the announcement.
Canada’s dollar recovered from a nearly three-week low following the decision. Headline inflation has been pushed toward the top of the Bank’s 1-to-3 per cent control band by higher gasoline prices.
Prime Minister Mark Carney is scheduled to be in Thunder Bay on Thursday to announce what the government is calling a historic investment in Canadian manufacturing. Counter-tariffs on about $27 billion of U.S. goods are set to take effect September 8.
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