Bank of Canada Keeps Rates the Same

The Bank of Canada announced today that it is keeping the overnight rate at 2.25%. This is exactly what most experts expected. The Bank said this rate should help keep inflation close to their 2% target, and they will make changes only if the economy starts moving in a different direction.

The decision to hold rates comes from several signs that the economy is doing a bit better. Canada’s economy grew by 2.6% in the third quarter, which was stronger than expected. The job market has also improved. Over the past three months, more people have been finding work, and the unemployment rate dropped to 6.5% in November.

Inflation is also calming down. Prices are rising at about 2.2% per year, and the Bank’s core measures show inflation sitting closer to 2.5%. These numbers are much more manageable than what we saw over the past few years, which is why the Bank feels comfortable holding rates steady for now.

There are still things to watch, especially around global trade. Tariffs, supply chain issues, and uncertainty about the 2026 CUSMA agreement could all affect the economy and interest rates in the future.

For the housing market, it’s interesting to see that even though rates have dropped from 5.00% to 2.25%, home prices haven’t really moved. National benchmark prices have slipped only about 1.4%. This shows that lower rates alone aren’t enough to push prices up right now, issues like low housing supply and affordability are still major factors.

Most economists believe rates will stay where they are unless we see big changes in the data. I’ll continue to monitor everything closely and share updates as we head into 2026.