Bank of Canada Holds at 2.25% for Fifth Straight Meeting, Vows Oil Shock Won't Become 'Persistent Inflation'
The Bank of Canada held its overnight-rate target at 2.25% on June 10, its fifth consecutive hold, keeping the Bank Rate at 2.50% and the deposit rate at 2.20%.
At a glance
- Bank of Canada maintained the overnight rate target at 2.25% on June 10, 2026, with the Bank Rate at 2.50% and deposit rate at 2.20%
- It was the fifth consecutive hold
- CPI inflation was 2.8% in April; core inflation measures moved down to around 2%
- Q1 GDP edged down 0.1%; consumer spending grew 1.4%; unemployment was 6.6% in May
- Oil prices were roughly $10 a barrel above the Bank's April MPR assumptions
VERDICT — CONFIRMED
The Bank of Canada held its overnight-rate target at 2.25% on June 10, its fifth consecutive hold, keeping the Bank Rate at 2.50% and the deposit rate at 2.20%. The Governing Council said CPI inflation reached 2.8% in April, pushed up by global oil prices roughly $10 a barrel above the assumptions in its April Monetary Policy Report, while core measures moved down to around 2%.
The statement noted GDP edged down 0.1% in the first quarter as US trade policy uncertainty weighed on activity, though consumer spending grew 1.4% and the unemployment rate stood at 6.6% in May. Governor Tiff Macklem said the economy was weaker than expected in the first quarter as US trade policy and the war in Iran spurred geopolitical uncertainty, but pointed to a strong May jobs report as a signal the economy could rebound in the second quarter.
The council said it will not let higher energy prices become persistent inflation and stands ready to respond as needed, with inflation projected to ease back to the 2% target in 2027. The widely expected decision opens a stretch of five major central-bank rate decisions in eight days, ahead of the ECB, Bank of Japan, Federal Reserve and Bank of England; the next announcement is scheduled for July 15.
Why it matters
the BoC's decision to look through an oil-driven inflation spike sets the template for how G7 central banks will weigh the Middle East energy shock against weakening growth this super week.
Key facts on file
- Bank of Canada maintained the overnight rate target at 2.25% on June 10, 2026, with the Bank Rate at 2.50% and deposit rate at 2.20%
- It was the fifth consecutive hold
- CPI inflation was 2.8% in April; core inflation measures moved down to around 2%
- Q1 GDP edged down 0.1%; consumer spending grew 1.4%; unemployment was 6.6% in May
- Oil prices were roughly $10 a barrel above the Bank's April MPR assumptions
- Next rate announcement scheduled for July 15, 2026
