Bank of Canada Holds Overnight Rate at 2.25% at First 2026 Meeting Amid Global Uncertainty

The Bank of Canada held its overnight target rate at 2.25% at its January 2026 policy meeting, keeping it unchanged for a second consecutive meeting after a cycle of rate reductions that began in June 2024 and ran until October 2025, bringing borrowing costs down from the 5% peak. The decision, announced on 28 January 2026, reflected the Governing Council's judgement that the current rate remained appropriate, with the outlook vulnerable to unpredictable US trade policies and geopolitical risks.

The January meeting was the first of the new year for the Governing Council, and the decision extended the pause that began in December 2025, when the Bank also held the rate at 2.25%. The Governing Council said the current policy rate remains appropriate, conditional on the economy evolving broadly in line with its outlook, but that uncertainty is heightened and it is prepared to respond if the outlook changes.