📊 July 30, 2025 – Bank of Canada Holds Rate at 2.75%

Why They Didn’t Cut Rates 💱

The Bank of Canada (BoC) opted to keep the overnight rate at 2.75%, marking the third consecutive hold since March, just as economists had expected. Inflation remains sticky just above the 2% target, and job growth is surprisingly solid, which dials down immediate pressure for further easing.

What’s Driving the Caution

• A recent Reuters poll, conducted July 21–25 with 28 economists, suggests uncertainty over escalating U.S. tariffs remains a major factor in holding steady.
• Inflation pressure persists—even core inflation hovers at or above 3%, above the BoC’s comfort zone.
• That said, the Canadian economy appears to show some resilience.  June added 83,100 jobs, unemployment dropped to 6.9%, and activity lingered near flat in Q2, hedging against a deeper slowdown.

What Economists Expect Next 🔍

• Most experts forecast at least two more rate cuts before year-end starting possibly in September at 2.50%, with another to follow if economic data weakens.

• The central outlook features conflict in trade policy and persistent inflation, a key reason why the BoC continues its wait‑and‑see approach.

💡 What It Means for You

If You’re Buying or Refinancing:

• Hope for lower rates this fall, but current stability actually support budgeting decisions now, and lock in those rate-holds.

• Considering a shorter-term mortgage, especially if rates fall again later in 2025.

If You’re Selling or Watching Market Trends:

• Expect some rate stability in the months ahead.

For the Broader Economy:

• Despite weakening GDP numbers, the job market and unexpected inflation hold-offs mean the BoC is staying cautious.

• Trade developments, especially around U.S. tariffs, remain a major wildcard for everything from exports to business sentiment.

✅ Bottom Line

The BoC’s decision on July 30, 2025 confirmed that interest rates remain at 2.75%, maintaining a steady course amid inflation pressures, resilient employment, and trade-related uncertainty. While cuts are expected later in the year, everything rests on incoming data.