Bank of Canada Holds at 2.25% — Fifth Freeze as Growth Fades

The Bank of Canada held its overnight rate at 2.25% for the fifth consecutive meeting — and the market reaction tells the real story. Yields fell, not rose, signalling that sophisticated investors aren't waiting for the next move; they're already pricing in prolonged stagnation.The Bank of Canada cited weak economic activity and persistent U.S. trade policy uncertainty as its rationale for holding. Major institutions including Vanguard, BMO, TD Economics, and CIBC now expect the 2.25% rate to hold through year-end 2026, while Mackenzie and IG Wealth leave the door open for a cut later in the year.Canadian government bond yields declined immediately after the decision, with investors repositioning for slower growth and extended policy stability — a significant duration signal for fixed income portfolios. Meanwhile, T. Rowe Price's 2026 Midyear Outlook warns that as central banks cut globally, inflation may prove broader and more durable than markets expect, demanding selective exposure across duration, credit, and FX.Subscribe to Hedgebra, follow Gianluca Sidoti on LinkedIn, and visit hedgebra.com for institutional-grade market intelligence.