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Bank of Canada Governor Tiff Macklem says the country’s key interest rate has reached the “low end of the ideal balance” between supporting growth and controlling inflation, a signal that markets are watching for a potential BoC policy rate pause after recent rate cuts. His remarks were reported by The Canadian Press via Advisor.ca.

In remarks reported by The Canadian Press, Macklem noted that monetary policy is now mildly stimulative, helping the economy while staying consistent with the Bank’s inflation target. The Bank’s benchmark rate currently stands at 2.25%, following a 25-basis-point cut announced on October 29, 2025. See the Bank of Canada decision note here and the official policy rate history here.

“Interest rates are now at the low end of what we see as the ideal balance between growth and inflation,” Macklem said. “They are supporting activity, but not so low that we risk reigniting inflationary pressures.”

The governor cautioned that while there may still be some room to ease if the economy weakens further, the scope for additional cuts is limited. Inflation risks, particularly from global tariffs and trade disruptions, remain on the Bank’s radar. For context on tariff-related inflation risks highlighted this year, see coverage here and analysis here.

Macklem described tariffs as a “slow-moving but meaningful” inflation threat and emphasized that the BoC’s focus is on preventing cost shocks from spreading through the broader economy.

He also highlighted Canada’s persistent productivity challenge as a key structural issue weighing on long-term growth and affordability, a problem, he noted, that “monetary policy can’t solve.” For background on the Bank’s neutral-rate framework and structural headwinds, see the BoC’s neutral-rate documentation here.

Where policy sits vs neutral

At 2.25%, the policy rate now sits at the bottom of the Bank’s estimated neutral range (2.25%–3.25%), according to the BoC’s 2025 assessment here and the April 2025 Monetary Policy Report appendix here. That placement means policy is already providing modest support to growth.

Looking ahead: December 10 meeting

With the next rate decision set for December 10, markets are now debating whether the central bank will pause its easing cycle. Current futures pricing tracked by BankofCanadaOdds.com shows declining odds of another cut, reflecting a more cautious tone from policymakers. Unless upcoming inflation or labour data show renewed weakness, odds favour a hold in December. Readers can monitor live probabilities on our dashboard and learn about our methodology in How it works.

What to watch

• Data flow before Dec 10: CPI, core measures, and job market signals. See the BoC rate history here and track probabilities on our live dashboard.
• Tariff path and supply chains: Any renewed trade disruption could limit easing even if growth softens. Context here.
• Productivity and potential growth: Structural constraints reduce how far policy can stimulate without stoking inflation. BoC background here.

Bottom line

For now, the message points to a BoC policy rate pause unless data clearly weaken. We will update the odds as new releases land. To receive our summary on each data print and how it shifts probabilities, subscribe.