Bank of Canada Holds Rates Steady Amid Trade Uncertainty
So, here’s what’s going on with the Bank of Canada and why mortgage experts are reacting the way they are. On July 30th, the Bank of Canada announced that it would hold its key interest rate steady at 2.75%. That means there’s no increase or cut—just a continuation of the current rate. For homeowners, especially those with variable-rate mortgages or people planning to renew their mortgage soon, this kind of stability is actually welcome news. It provides a bit of breathing room in an environment that’s still full of uncertainty.
Now, the decision wasn’t made lightly. The Bank’s latest Monetary Policy Report made it clear that there are a lot of moving parts, particularly around global trade—mainly due to unpredictable U.S. tariff decisions. New tariffs have already caused some disruption in global trade, and it’s still unclear how much more may come or be rolled back. This uncertainty has a ripple effect, making it harder to forecast economic growth or inflation with any confidence.
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Despite these headwinds, Canada’s economy has shown some resilience. Growth was strong in early 2025, but that was mostly due to businesses rushing to export before new U.S. tariffs kicked in. Since then, things have cooled off. GDP likely shrank by around 1.5% in the second quarter, mainly because exports dipped and consumer spending slowed. But employment has held steady in most sectors, and inflation is sitting close to the Bank’s target of 2%, even if underlying inflation has ticked up slightly.
Mortgage professionals are seeing the Bank’s decision as a positive sign. Holding rates steady gives people a chance to catch their breath and plan without worrying about sudden changes in their payments. It also signals that the Bank is taking a cautious, data-driven approach—keeping an eye on both domestic inflation and international pressures before making any further moves.
The Bank emphasized it’s ready to make changes if necessary. If inflation remains contained and the economy continues to slow, a rate cut could be on the table. On the flip side, if higher costs from tariffs start to push inflation up, they may need to hold or even raise rates. But for now, they’re holding steady, which—according to mortgage experts—isn’t such a bad thing at all. Stability, especially in uncertain times, is a small win for Canadian homeowners.
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