The Bank of Canada decided to keep its benchmark interest rate parked at 2.25% on April 29, choosing to sit tight while two massive wildcards, the Iran conflict and US trade tariffs, continue to cloud the economic picture.
Governor Tiff Macklem made clear that the central bank isn’t married to either direction. The BoC is prepared to cut or hike rates depending on how these external shocks play out.
Two crises, one rate decision
The Bank of Canada is staring down two problems that pull in opposite directions.
On one side, the conflict in Iran has sent global oil prices surging since February 2026. That’s pushing inflation higher, the kind of pressure that typically calls for rate increases. Disrupted shipping routes and spiking energy costs are feeding into consumer prices across the board.
