By Melissa Shin
(Bloomberg) — Bank of Canada officials agreed on holding the overnight rate at 2.25% earlier this month, but are unsure whether their next policy shift will be to lower rates again or to raise them.
In a summary of deliberations of their Dec. 10 decision, policymakers said the “high level of uncertainty” made it “difficult to predict when and in which direction the next change in the policy rate would be.”
The seven members of the central bank’s governing council discussed how the future of the U.S.-Mexico-Canada Agreement would affect the outlook. If the trade deal were to fall apart, it would be very damaging to the economy. But a resolution that “provided some stability in North American trade policy could spur on business investment,” the bank’s summary said.
The central bank reiterated that it’s prepared to respond if the outlook for economic activity or inflation changes significantly.
Policymakers also noted that quarterly gross domestic product figures had been volatile of late, “an indication of how challenging it will be to assess the underlying trends in the economy.”
They expected fourth-quarter GDP to be soft, with increases in consumption, housing activity and government spending offsetting weakness in business investment and net exports.
Initial GDP estimates released Tuesday showed a small expansion in November, following a 0.3% contraction in October, indicating that growth is likely to be negative in the quarter.
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Last modified: December 24, 2025
