Perspectives Bank of Canada holds steady as oil-price surge raises inflation risks
Mar 19, 2026
Jean-François Perrault, Scotiabank’s chief economist known for Canadian macro and policy analysis, breaks down the Bank of Canada’s hold at 2.25%. He discusses how Iran-related oil shocks lift inflation risks. He compares regional impacts across provinces and outlines timing risks for future rate moves and mortgage renewals.
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Why The Bank Of Canada Stayed Put
- The Bank of Canada held the policy rate at 2.25% because the outlook is highly mixed and dynamic.
- Jean-François Perrault says weaker early-2026 growth contrasts with stronger inflation risks, so doing nothing was a sensible interim choice.
Canada's Soft Start And Expected Midyear Pickup
- Canada's economy shows a mixed start to 2026 with sharp January job losses and weak exports offsetting late-2025 momentum.
- Perrault expects GDP to pick up later in 2026, with a 1–1.5 percentage point boost as fiscal and business confidence builds.
How The Iran Conflict Shocked Oil Markets
- The war in Iran and Strait of Hormuz disruptions pushed WTI near $100, creating a major global inflationary shock.
- Perrault notes 20% of world oil transits Hormuz, so tanker standstills sharply raise global oil and gas prices and market volatility.