The Bank of Canada (BoC) is widely expected to hold its key interest rate at 2.25 per cent today, March 18, 2026, as it navigates a complex economic landscape. The central bank is grappling with the economic fallout from the ongoing conflict between the United States and Iran, coupled with persistent trade uncertainties.
A recent Reuters poll indicated that economists anticipate the BoC to maintain its current policy rate. Since the last rate announcement in January, economic conditions have become increasingly clouded. Penelope Graham, a mortgage expert at Ratehub. ca, suggests that rising oil prices, if sustained, could reignite inflation and deter the Bank from future rate cuts, despite Canadians struggling with high living costs.
Adding to the complexity, February's annual inflation figures came in slightly lower than expected at 1.8 per cent, influenced by the end of a tax holiday in mid-February 2025. The Bank of Canada will also be considering the recent jobs report, which revealed a rise in the unemployment rate to 6.7 per cent following the loss of 84,000 jobs in February. The Bank of Canada aims to maintain inflation between 1 and 3 percent, targeting 2 percent.
Given these factors, experts predict the Bank of Canada will likely maintain the interest rate, with little prospect of relief for the remainder of the year. Variable mortgage rates remain the lowest-priced borrowing option, but fixed rates are facing upward pressure due to global uncertainties impacting Canadian bond yields.
