The Bank of Canada held its benchmark interest rate unchanged at 2.75% in its April 2025 decision, as expected by half of the market, to mark the first hold following 2.25 percentage points of cuts in seven consecutive decisions. The governing council noted that the unpredictability on the magnitude of tariffs placed downside risks on growth and lifted inflation expectations, warranting caution regarding the continuation of monetary easing. The higher uncertainty stemmed from no clear tariff path by the United States prompted the BoC Governing Council to present two economic scenarios in its latest Monetary Policy Report. Should the US limit the scope of its tariffs on Canada, the BoC expects growth to temporarily weaken and inflation to hold near the 2% target. Should the US proceed with an all-out trade war with Canada and China, the BoC penned a recession this year and inflation around 3%.