The Bank of Canada maintains its policy rate at 2.25% amid a cautiously optimistic outlook, as domestic resilience meets external uncertainty and mixed economic signals.
The Bank of Canada left its policy rate unchanged at 2.25% following its Governing Council meeting on December 10, 2025, judging that current settings remain appropriate and sit at the lower end of neutral after a cumulative 100 basis points of easing earlier in 2025. According to the Bank’s press conference, Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers said the stance should keep inflation close to the 2% target while supporting the economy as it adjusts to structural shifts.
The central bank’s decision reflects a mix of resilience and fragility in the Canadian economy. Recent upward revisions to GDP underpinned a stronger-than-expected profile through much of the year, yet the Bank signalled growth is set to soften in the fourth quarter and warned that headline data have become more volatile. Industry analysis has echoed that view: third-quarter expansion of 2.6% was partly driven by volatile trade flows, while final domestic demand showed little momentum, underscoring a cautious outlook for near-term activity.
Labour-market indicators present a similarly mixed picture. Unemployment has eased to about 6.5% and payrolls have improved, but new hiring has been concentrated in part-time positions and business hiring intentions remain subdued. TD Economics noted that while the labour market has improved, firms’ investment appetite is restrained by trade uncertainty and tariff pressures.
On inflation, the Bank reported consumer price inflation running near target, CPI was around 2.2% with measures of underlying inflation roughly 2.5%, and said base effects could produce near-term bumps without changing the medium-term outlook. The Governing Council judged that the current policy configuration should be sufficient to bring inflation back toward 2% over time, while remaining attentive to upside risks from global developments.
External risks were prominent in outside commentary. The Conference Board of Canada highlighted persistent global uncertainty, pointing to geopolitical tensions and rising trade protectionism, particularly in the United States, as factors that could weigh on Canadian investment and exports. Market participants had widely expected the hold, with commentators saying the Bank’s assessment aims to balance the dual task of keeping inflation anchored and cushioning the economy through ongoing structural adjustment.
Operationally, the Bank maintained the Bank Rate at 2.50% and the deposit rate at 2.20%, details confirmed at the December 10 press conference. Governor Macklem addressed media questions about the outlook and the rationale for pausing after several rate cuts, stressing the need for a measured approach as incoming data evolve.
Looking ahead, the Bank signalled cautious vigilance. Its path will depend on incoming readings on growth, labour market dynamics and inflation persistence, particularly given recent data volatility and elevated global risks. In that environment, the policy stance is intended to remain flexible: supportive enough to foster recovery in domestic demand while calibrated to prevent a renewed rise in inflationary pressures.
- https://investinglive.com/centralbank/bank-of-canada-governing-council-meeting-minutes-from-the-december-10-2025-decision-20251223/ – Please view link – unable to able to access data
- https://www.bankofcanada.ca/multimedia/press-conference-policy-rate-announcement-december-2025/ – On December 10, 2025, the Bank of Canada held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers discussed the decision, highlighting that the current policy rate is appropriate to keep inflation close to the 2% target while supporting the economy through structural adjustments. The press conference provided insights into the Governing Council’s deliberations and the economic outlook.
- https://economics.td.com/ca-boc-interest-rate-announcement – TD Economics reported on the Bank of Canada’s decision to maintain its policy rate at 2.25% on December 10, 2025. The report noted that while tariffs and trade uncertainty continue to weigh on business investment, the economy has proven to be relatively resilient. Despite improvements in the labour market, hiring intentions remain subdued. The Bank expects inflation to moderate in the coming months, with underlying inflation around 2.5%. The report emphasized that the current policy rate is deemed appropriate to keep inflation close to 2% while aiding the economy through structural adjustments.
- https://www.conferenceboard.ca/insights/bank-of-canada-maintains-2-25-per-cent-rate-facing-global-instability/ – The Conference Board of Canada discussed the Bank of Canada’s decision to maintain the policy interest rate at 2.25% on December 10, 2025. The article highlighted that while the global economy shows resilience, significant uncertainty persists, primarily driven by geopolitical tensions and rising trade protectionism in the United States. The report noted that Canada’s economy expanded by 2.6% in the third quarter, but this growth was largely fuelled by volatile trade numbers, as final domestic demand showed no growth. The article emphasized the Bank’s cautious stance amid global instability.
- https://globalnews.ca/news/11571499/bank-of-canada-interest-rate-announcement-december-2025/ – Global News reported on the Bank of Canada’s decision to hold its key interest rate at 2.25% on December 10, 2025. The article noted that this decision was widely expected, as economists and markets had anticipated a hold heading into December. The Bank stated that the rate is ‘at about the right level,’ but the uncertain outlook means they remain cautious into 2026. The report highlighted that the Bank’s decision reflects the current state of the economy and the need to balance various economic forces.
- https://www.youtube.com/watch?v=mMskYaiY0pw – In this video, Bank of Canada Governor Tiff Macklem discusses the central bank’s decision to hold the key interest rate at 2.25% on December 10, 2025. The video provides insights into the Bank’s rationale behind the decision and its outlook on the Canadian economy. Governor Macklem addresses questions from the media, offering a comprehensive understanding of the Bank’s monetary policy stance and the factors influencing its decisions.
- https://www.youtube.com/watch?v=uw9bvZdRRis – This video features Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers discussing the central bank’s decision to hold the key interest rate at 2.25% on December 10, 2025. The video provides a detailed explanation of the Bank’s monetary policy decision, the economic factors considered, and the outlook for the Canadian economy. Governor Macklem and Deputy Governor Rogers address questions from the media, offering valuable insights into the Bank’s policy considerations and future expectations.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The narrative is based on the Bank of Canada’s official press release from December 10, 2025, which is the earliest known publication date. The report appears to be original, with no evidence of recycled content. The inclusion of updated data, such as the 2.6% GDP growth in Q3 2025, suggests a higher freshness score. However, the report was published on December 23, 2025, which is more than 7 days after the original press release, indicating a slight delay. The delay is understandable given the time required for analysis and reporting. No discrepancies in figures, dates, or quotes were found. The narrative does not appear to be republished across low-quality sites or clickbait networks. The use of a press release as the primary source typically warrants a high freshness score.
Quotes check
Score:
9
Notes:
The direct quotes from Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers are consistent with the Bank of Canada’s official press release from December 10, 2025. No earlier usage of these quotes was found, indicating originality. The wording matches the official statements, with no variations noted.
Source reliability
Score:
10
Notes:
The narrative originates from the Bank of Canada’s official press release, a reputable and authoritative source. The Bank of Canada is a central financial institution with a well-established public presence and a legitimate website. The report is also published on investingLive, a financial news platform, which adds credibility.
Plausability check
Score:
10
Notes:
The claims made in the narrative align with the Bank of Canada’s official statements and recent economic data. The reported 2.6% GDP growth in Q3 2025 is consistent with other reputable sources. The narrative provides specific factual anchors, including names, institutions, and dates, enhancing its credibility. The language and tone are appropriate for the topic and region, with no inconsistencies noted. The structure is focused and relevant, without excessive or off-topic details. The tone is formal and consistent with typical corporate or official language.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative is based on the Bank of Canada’s official press release from December 10, 2025, and aligns with other reputable sources. The quotes are original and consistent with the official statements. The source is reliable, and the claims made are plausible and well-supported. The slight delay in publication is understandable given the time required for analysis and reporting. No significant credibility risks were identified.