The latest minutes from the Bank of Canada’s December board meeting revealed a lot of information. Although the global economy demonstrates considerable resilience, the pressure from U.S. protectionist policies cannot be underestimated. More troublesome is that inflation seems to be stirring again, with upward risks clearly increasing.

In the domestic context, the Canadian economy is still in a state of oversupply after the latest data revisions. The Central Bank views the uncertainty of trade policies as the main risk at the moment—especially the review of the USMCA, which could potentially impact business investment and the overall economic outlook at any time.

Weighing various factors, the Bank of Canada ultimately decided to keep the policy interest rate unchanged at 2.25%. The Central Bank's stance is that the current level of interest rates is still essentially appropriate.