BOC Macklem: Given the current balance of risks, the policy rate is at the right level

The Bank of Canada (BoC) has kept the policy interest rate at 2.25%, arguing that this level is appropriate to maintain inflation close to 2% while navigating a period of structural trade adjustments. Despite U.S. tariffs impacting key sectors, the Canadian economy remains more resilient than expected. CPI inflation is maintained around 2%, with core inflation between 2.5% and 3%. The labor market shows modest improvements, with an unemployment rate of 6.5%. However, heightened uncertainty, particularly around U.S. trade policy and the CUSMA review, poses challenges. Recent GDP revisions indicate the economy entered 2025 in better shape than previously thought, contributing to its resilience. The BoC is prepared to respond to any changes in the outlook due to elevated uncertainty.