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The Bank of Canada announced on Wednesday that it would keep the key benchmark interest rate unchanged at 2.75%, citing the need to investigate the impact of U.S. trade policy. However, it also stated that if the economy weakened due to tariffs, it might be necessary to lower interest rates again. This decision marks the Bank of Canadas second consecutive wait-and-see approach, following a significant nine-month rate-cutting cycle that saw rates lowered by 225 basis points. The Governor of the Bank of Canada stated at a press conference, "The trade conflicts initiated by the United States remain the biggest headwind facing the Canadian economy." He described U.S. trade policy as highly unpredictable, and said, "While we gather more information, we have a clear consensus to keep policy unchanged."