March 19, 2026 | Uncategorized
Bank of Canada Holds Rates Steady Heading into Spring
Happy Friday,
As we head into the spring market, the Bank of Canada has announced it is holding its benchmark interest rate at 2.25%; a move most economists were expecting.
Here’s a quick breakdown of what’s happening and what it means:
What’s Happening in Canada’s Economy
Canada’s economy saw a slight pullback at the end of 2025, with GDP declining modestly. That said, consumer and government spending are still holding up, helping support overall demand.
The labour market has softened a bit, with unemployment rising to 6.7% in February, and recent job gains being offset early this year. Housing activity also remains on the quieter side for now.
Inflation Update
Inflation continues to ease, now sitting at 1.8%, which is close to the Bank’s target.
However, there are a few pressures to watch:
- Food prices are still elevated
- Rising energy costs, especially gas, are expected to push inflation up slightly in the near term
Global Factors at Play
There’s been some increased volatility globally:
- Bond yields are up, while stock markets have pulled back
- Ongoing conflict in the Middle East is creating uncertainty, particularly around energy prices
- The Canadian dollar has remained relatively stable against the U.S. dollar
While the global economy is still growing, there are mixed signals across major regions, and uncertainty remains high.
Why the Bank Held Rates
The Bank of Canada is balancing two key concerns:
- Slowing economic growth
- Potential inflation pressures from rising energy prices
With that in mind, they’ve chosen to hold rates steady for now, while continuing to monitor:
- Global economic conditions
- Trade policy and tariffs
- The impact of ongoing geopolitical events
Their outlook suggests modest growth ahead, though likely softer than previously expected.
What’s Next
The next rate announcement is scheduled for April 29th, and we’ll be watching closely.
Our Take
For buyers and sellers, this pause offers some short-term stability as we move further into the spring market. While there’s still some uncertainty globally, lower inflation and steady rates can help build confidence locally.
If you’ve been thinking about making a move this spring, it’s a great time to start the conversation, we’re always happy to help you explore your options.
Enjoy the weekend,
Vicky & Ryan Urban
Brokers, Urban Group Realty Team
Frequently Asked Questions
The Bank chose to hold rates at 2.25% to balance two things: a slowing economy and the risk of inflation rising again, particularly due to higher energy prices. For now, they’re taking a wait-and-see approach.
Not necessarily. While inflation has come down, there are still global factors—like energy prices and economic uncertainty—that could influence future decisions. The Bank is watching closely before making any changes.
Variable mortgage rates are directly tied to the Bank of Canada’s rate, so those will remain unchanged for now. Fixed rates are influenced more by bond markets, which have been a bit more volatile lately.
It can be. Stable rates provide a bit more predictability, which can help buyers plan with more confidence as we move into the spring market.
A steady rate environment can help bring more buyers back into the market. While activity has been quieter, this stability may help build momentum as the spring market picks up.
It depends on your goals. Trying to time the market perfectly is tough—what matters most is your personal situation. With rates holding steady, many are choosing to make a move now rather than wait for uncertainty to clear.
We’re seeing a mix of factors—slower economic growth, softer employment numbers, and global uncertainty. That said, lower inflation and stable rates are helping create a more balanced environment.
The Bank of Canada’s next scheduled update is April 29th. We’ll be keeping a close eye on it and sharing any key updates.
Interest rates are just one piece of the puzzle. Inventory levels, buyer demand, and overall confidence in the market will all play a role this spring.
Every move is different, and we’re always happy to walk you through your options—whether you’re just starting to think about it or ready to take the next step.
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