Mortgage Blog
Bank of Canada Rate Announcement - April 29, 2026
April 29, 2026 | Posted by: Crescent Mortgage Corp.
As was widely expected, the BoC held its target for the overnight rate at 2.25%.
Everchanging US trade policy and the war in Iran continue to cause volatility and uncertainty in global economies. The BoC’s April outlook assumes that tariffs remain unchanged and price of oil drops to $75 USD per barrel by the middle of next year.
The conflict in the Middle East has increased energy prices sharply caused major transportation disruptions worldwide. This has resulted in worldwide inflation and diminishing growth prospects for oil-importing countries. Daily developments in the war have made financial conditions volatile. The global economy is expected to grow 3% per year between 2026 and 2028.
The outlook for economic growth in Canada is little changed from the BoC’s January projection. Economic activity is supported by consumer and government spending, while tariffs and trade uncertainty weigh on exports and business investment. The housing market remains muted, as slow population growth, economic uncertainty and ongoing affordability issues remain.
The BoC’s latest forecast projects GDP growth of 1.2% for this year, rising to 1.6% in 2027 and 1.7% in 2028 as exports and business investment slowly pick up. CPI inflation jumped to 2.4% in March due to sharply higher gasoline prices. That increase followed several months of slowing inflation data. Core inflation continues to ease and remains at just above 2%. There is little evidence that oil prices have filtered through to goods and services prices, but the BoC will be paying close attention in the months ahead. Near-term inflation expectations have increased with higher gasoline prices and still-elevated food price inflation, but longer-term expectations have not changed. The BoC expects CPI inflation to hit 3% in April but drop back down to their 2% target early next year assuming oil prices moderate.
The BoC is closely monitoring the impact of the conflict in the Middle East and how the economy is responding to US tariff policy uncertainty. The BoC is “committed to maintaining Canadians’ confidence in price stability through this period of global upheaval.”
The next interest rate announcement is scheduled for June 10, 2026.