Canada's central bank has a problem. Almost any move it makes would make something else worse.
So on Wednesday it did nothing, again, for the fifth time in a row.
The bank is in a tight spot. Inflation is creeping up, and it hit 2.8% in April as high oil prices fed through.
At the same time, the economy actually shrank a little in the first quarter. That leaves the bank with no clean move.
Raising rates to fight inflation would slow a weak economy even more. Cutting rates to help growth would let prices run hotter.
So the bank held at 2.25%. It is like driving with one foot on the gas and one on the brake.
Press either pedal, and something breaks. For now, the bank says holding balances those risks.
The bank also frets that high oil could seep into other prices over time. So far, it says, that spread stays limited.
The hold was no shock. A poll of 34 economists had expected the bank to sit still.
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Governor Tiff Macklem chose his words with care. He said the economy is weak but "not clearly in recession."
His read is that it hasn't really grown in the past year. But it hasn't shrunk either, so he won't call it a downturn yet.
Growth had already dropped 1% in the final quarter of 2025. As Macklem put it, look through the bumps and the economy has stalled, not crashed.
The bank also sees "limited evidence" that high energy costs are spreading to other prices. It plans to look past the war's short-term hit, but won't let it become lasting inflation.
The job market backs him up. Canada added 88,000 jobs in May, and unemployment hit a five-month low.
Even so, hiring has gone nowhere on net since January. The bank still expects growth to pick back up later this year.
The next move could go either way. If high oil prices keep pushing up inflation, the bank may hike.
But if new U.S. tariffs hit the economy hard, it may cut instead. Oil is now running about $10 a barrel above the bank's spring estimate.
The bank will watch two things above all: the war's pull on oil, and the U.S. trade fight. Either one could force its hand.
One major bank, BMO, expects the central bank to keep holding through the end of the year. It read the bank's fresh "weak" label as a small shift after the surprise dip in first-quarter growth.
The bank meets again later this summer with fresh data in hand. Until then, the watchword is patience.
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