The Bank of Canada held its benchmark interest rate steady at 2.25% but warned that a deepening trade dispute with the United States has increased risks for the economic outlook. The central bank's statement directly addressed the new U.S. tariffs that followed the breakdown of trade talks in late August. [11, 13]
The bank noted that the tariffs and Canada's planned retaliatory measures will likely raise costs for businesses and could push consumer prices higher. [11] While the interest rate decision was widely expected, the official acknowledgement of the trade war's impact introduces significant uncertainty for North American markets, even as recent Canadian economic data showed a rebound. [7, 13]
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