Overview
- The Bank of Canada kept its key policy rate at 2.25% on Wednesday, the sixth consecutive hold since it cut rates in October 2025.
- Officials said growth is improving and core inflation measures are closer to the 2% target, even though headline inflation rose in May because of higher fuel and energy costs.
- Mortgage borrowers face mixed effects as fixed rates have mostly steadied with some discounted offers below 4% while a CMHC survey found 35% of renewers feel greater financial pressure and average monthly payments rose about $375.
- Housing markets diverged in June with Toronto and Vancouver posting year‑over‑year sales gains while national asking rents fell 4.3% year over year, marking the 21st straight month of declines.
- Markets and policymakers are focused on incoming inflation and employment releases ahead of the Bank’s next decision on Sept. 2 to determine whether a rate cut remains realistic this year.