The Bank of Canada is widely expected to hold interest rates at current levels at its next policy meeting on June 10.
Economists surveyed by Reuters (TRI) overwhelmingly expect the Bank of Canada to keep its benchmark overnight interest rate at its current level of 2.25%.
It would be the fifth consecutive time that Canada’s central bank has decided to take no action on interest rates.
Futures markets are currently pricing in a 95% chance that there’s no change to Canada’s interest rates on June 10.
At its last meeting in April, Bank of Canada Governor Tiff Macklem said that “monetary policy may need to be nimble” as the economy adjusts to the war in Iran and higher energy prices.
Since that last meeting, Canada’s economy has entered a recession after registering no growth in the past two quarters.
The economic weakness makes it difficult for the Bank of Canada to raise interest rates even as energy prices spike and cause inflationary pressures throughout the country.
The most recent inflation report from Statistics Canada showed that consumer prices jumped the most in nearly two years.
Higher gas prices driven by the war in Iran pushed Canada’s annual inflation rate up to 2.8% in April. The Bank of Canada targets inflation at a 2% annualized rate.
In 2024 and 2025, the Bank of Canada lowered interest rates more than half a dozen times as evidence emerged that inflation had been declining.
The last interest rate cut occurred in October 2025, when the central bank lowered its overnight rate by 25 basis points to 2.25%.
