The Bank of Canada has lowered its target for the overnight rate by 25 basis points to 2.25%, marking its second consecutive rate cut this year. This decision comes amid continued economic uncertainty, influenced by US trade policy and a softening labour market, as the Bank seeks to support growth while maintaining price stability.
In its statement, the Bank noted that “Canada’s economy contracted by 1.6% in the second quarter, reflecting a drop in exports and weak business investment amid heightened uncertainty. Meanwhile, household spending grew at a healthy pace.” The Bank also expects growth to receive support from rising consumer and government spending and residential investment, before picking up gradually as exports and business investment begin to recover.
This latest rate cut may help stabilize housing demand and market confidence through the remainder of 2025, but the Bank emphasized a cautious outlook as Canada faces a period of economic transition.
Bank of Canada’s 2025 Policy Interest Rate Announcement Schedule
Bank of Canada announces its decision for the overnight rate target eight times a year, typically on a Wednesday. The schedule for 2025 is as follows:
Wednesday, January 29
Wednesday, March 12
Wednesday, April 16
Wednesday, June 4
Wednesday, July 30
Wednesday, September 17
Wednesday, October 29
Wednesday, December 10
Read the full interest rate announcement below:
The Bank of Canada today reduced its target for the overnight rate by 25 basis points to 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%.
With the effects of US trade actions on economic growth and inflation somewhat clearer, the Bank has returned to its usual practice of providing a projection for the global and Canadian economies in this Monetary Policy Report (MPR). Because US trade policy remains unpredictable and uncertainty is still higher than normal, this projection is subject to a wider-than-usual range of risks.
