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Blog Post: Bank of Canada Holds Overnight Lending Rate at 2.75% Amid Global Uncertainty

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After seven consecutive rate cuts, the Bank of Canada holds its overnight rate at 2.75%—keeping the prime lending rate at 4.95%. With tariff uncertainty and trade tensions still in play, further drops of 25–50 basis points may be on the horizon. Mark your calendars for the next announcement on June 4th!

Today, the Bank of Canada held its overnight lending rate steady at 2.75%, which maintains the banks’ prime lending rate at 4.95%. This decision comes after seven consecutive rate drops, reflecting a cautious pause amid growing uncertainty in the global economic landscape.


Key Factors Behind the Decision:

  • Seven Rate Cuts Behind Us: After a series of consecutive drops, the current pause signals that the Bank of Canada is taking a step back to assess the market.

  • Global Trade Uncertainty: The unpredictability of U.S. trade policy, notably under the influence of Donald Trump’s legacy and ongoing tariff discussions, has clouded the Canadian economic forecast.


  • Future Rate Easing: Market analysts expect further easing—with potential rate cuts of another 25 to 50 basis points later this year—to help stimulate the economy if uncertainties continue.

  • Save the Date: Keep an eye on your calendars—the next Bank of Canada announcement is set for Wednesday, June 4th.


While the economic outlook remains murky due to ongoing trade tensions and tariff-related uncertainties, the current decision reflects a measured approach. The Bank is watching developments closely, primarily to balance the risks of inflation with the need to support economic growth in a restrained global environment.


As these factors continue to evolve, both Canadian consumers and businesses should be prepared for potential adjustments in borrowing costs. We’ll be monitoring the situation closely and will update you on any further moves by the Bank of Canada.

 
 
 

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