Bank of Canada relying on 'judgment' to steer policy rate through Iran war shock

Deputy Governor Carolyn Rogers looks on as Bank of Canada Governor Tiff Macklem is seen during a news conference in Ottawa, Wednesday, March 18, 2026. THE CANADIAN PRESS/Adrian Wyld

Monetary policy-makers at the Bank of Canada say in newly released documents that they’re relying more heavily on their own reasoning to chart a course for the benchmark interest rate through conflicting economic signals tied to the war in the Middle East.

A summary of deliberations from the Bank of Canada governing council’s decision to hold the policy rate steady at 2.25 per cent on March 18 was released today.

Those records show council members debating the best course of action for monetary policy with spiking energy prices set to fuel a rise in inflation at the same time as Canada’s economy underperforms.

The deliberations say that the central bank’s decision-makers will use their best “judgment” and focus on managing risks in the economy as various signals point to the need for tighter and looser monetary policy at the same time.

Given that inflation was showing signs of stability ahead of the Middle East conflict, governing council ultimately decided they had the bandwidth to wait and see how long the Iran war would last before deciding whether to move on interest rates.

Economists widely expect the Bank of Canada to hold its policy rate steady again at its next interest rate decision on April 29.

This report by The Canadian Press was first published April 1, 2026.

Craig Lord, The Canadian Press