On April 16, 2025, the Bank of Canada held its key interest rate at 2.75%, continuing its cautious approach in response to global trade uncertainty, slowing economic growth, and unpredictable inflation trends.

With the Bank Rate set at 3% and the deposit rate at 2.70%, this steady stance reflects the Bank’s balancing act between promoting economic stability and keeping inflation in check.

Why the Bank Hit Pause: Global and National Pressures

The decision comes at a time of significant global economic uncertainty, largely driven by sudden shifts in U.S. trade policy and escalating Tariff Tensions. These changes are making it harder to forecast GDP growth and inflation in both Canada and around the world.

The Bank of Canada outlined two possible outcomes in its April Monetary Policy Report (MPR):

• In the first scenario, tariffs are limited, economic growth slows briefly, and inflation holds close to the 2% target.
• In the second, a prolonged trade war could push Canada into recession, with inflation spiking above 3% in 2026.

In both cases, volatility in the markets, rising inflation expectations, and weakening business sentiment are causing concern.

Canada’s Economic Outlook: Slower Growth, Shaky Confidence

Here in Canada, the economy is losing momentum:

• Consumer spending, business investment, and residential activity all softened in Q1
• Employment dropped in March, with businesses signaling hiring slowdowns
• Wage growth is moderating, reflecting lower employer confidence

Inflation was recorded at 2.3% in March, slightly down from February, but still higher than January’s 1.8%. The drop is largely due to the end of the GST/HST pause and lower oil prices, but tariffs and supply chain pressures may drive some costs back up.

What This Means for Real Estate in the GTA

For homebuyers, sellers, and investors in the Greater Toronto Area, this rate hold has key implications:

📌 Buyers:

With the overnight rate steady at 2.75%, mortgage rates are likely to remain stable good news if you’re thinking of buying this spring. Now is a great time to get pre-approved and explore options before the next policy shift in June.

📌 Sellers:

Uncertainty may affect buyer confidence, especially for higher-priced homes. Positioning, pricing, and marketing will play a big role in keeping your listing competitive.

📌 Investors:

The Bank’s caution suggests that big economic changes could still be ahead. Watching inflation, wage growth, and buyer sentiment will help you time your moves wisely especially in preconstruction or income property markets.

The Bigger Picture: Why the Bank is Being Cautious

The Bank’s Governing Council made it clear: they’re closely watching how higher tariffs affect Canadian exports, business investment, jobs, and inflation expectations.

The next interest rate announcement is scheduled for June 4, 2025, and the next Monetary Policy on July 30, 2025.

Stay Ahead of the Market

The real estate landscape is shifting, staying informed is your best strategy.
📊 Follow our blog for real-time updates and expert analysis
📞 Contact us today for tailored real estate advice in the GTA