19/03/2026
The Bank of Canada announced that it is holding its benchmark interest rate at 2.25%, with no change from the previous announcement.
While the decision to hold rates was widely expected, the reasoning behind it offers important insight into where things may be headed. The Bank is currently balancing two key forces:
1. Economic momentum in Canada is slowing, with recent data showing softer growth, a cooling labour market, and weaker near-term activity.
2. Renewed inflation pressures are emerging, as rising global energy prices, driven in part by geopolitical tensions, are expected to push inflation higher in the short term.
At the same time, underlying inflation has eased to around 2%, which is right in line with the Bank’s target. This hold signals a “wait-and-see” approach. The Bank is assessing:
1. The impact of global uncertainty
2. How the Canadian economy adjusts in the coming months
3. Whether inflation remains controlled or begins to rise again
For homeowners and buyers, stability in rates provides a valuable window to plan. For variable-rate mortgages there is no immediate change to payments and fixed rates may continue to fluctuate based on bond market movements.
Looking ahead the Bank has made it clear it is prepared to act if needed, in either direction. If inflation rises more than expected, rate increases could return. If economic weakness deepens, rate cuts could still be on the table.
Having a clear strategy matters now more than ever. Whether you're approaching a renewal, considering a purchase, or simply want to stay informed, this is a great time to review your options and plan with confidence.
With thanks to:
Derek Christiansen - Mortgage Alliance
(604) 220-6161
[email protected]
