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Bank of Canada Holds as Uncertainty Persists

Jul 15, 2026

As widely anticipated, on July 15, 2026 the Bank of Canada maintained its overnight rate at 2.25%, the sixth consecutive hold since the last cut in October 2025. Prime rate remains at 4.45%.

Why The Hold? Governor Macklem stated: “Based on the MPR (Monetary Policy Report) projection published today, Governing Council judges the current policy rate remains appropriate to sustain the economic recovery and bring inflation back to the 2% target.” He also noted that “the two biggest risks to the projection are still the conflict in the Middle East and our trade relationship with the United States.”

Rate Path Forward: Given that “uncertainty remains elevated”, the Bank of Canada provided no clear direction or timing for possible rate change(s).  In fact, it remained neutral and explicitly flagged risks in both directions.  The Bank stated:

  • “Canada’s economy is showing signs of improvement. Growth is picking up, and inflation is projected to ease gradually from its recent spike. There are still important risks and uncertainties related to the war in the Middle East [upward rate risk] and US trade policy [downward rate risk].”
  • “Governing Council will continue to assess the strength of the Canadian economy and the outlook for inflation, and is prepared to adjust monetary policy as needed [meaning an increase or decrease in the rate if needed].

What This Means for Mortgages: With the Bank of Canada on hold for now, variable-rate holders won’t see any immediate changes to their payments. As fixed rates tend to track bond yields, which move regularly in response to changes in rate expectations, yields have been extremely volatile over the past 5 months.  Given the unusually high levels of uncertainty, now is a particularly important time to review your mortgage strategy or look at securing a rate hold. If rates go up, you are protected; if rates come down, you may still benefit from the lower rate.

Bank of Canada Links:

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