Canada's central bank is projected to maintain its benchmark interest rate at 2.25% this Wednesday, with moderating inflation allowing officials to hold rates steady and economic expansion following a brief contraction reducing pressure to ease monetary policy. A Reuters poll of 36 economists found unanimous expectations that interest rates will remain unchanged, with most projecting stability through at least July of the following year. The announcement will arrive alongside the Bank of Canada's quarterly Monetary Policy Report, which provides updated projections for economic expansion and price increases after an oil-price disruption and ongoing trade uncertainty with the United States, and an economist at Signal49 Research noted that the central bank's decision hinges on whether inflationary pressures remain elevated. According to the statement, economic conditions have not deteriorated sufficiently to warrant further intervention by the Bank of Canada. Economic output declined during the last quarter of the previous year and the initial three months of 2026, yet growth returned in April at a pace that exceeded forecasts. Last week's figures indicated that June's unemployment rate declined to 6.5%. The previous rate adjustment occurred in October, lowering it to 2.25% to 3.25%, the lower boundary of what policymakers consider a neutral setting. If Wednesday's decision maintains current levels, it would represent the sixth consecutive meeting without adjustment. Rising prices continue to serve as the primary factor limiting monetary policy adjustments. In May, the consumer price index climbed to 3.2% on an annual basis, moving outside the monetary authority's target band of 1%-3% for the first occasion since December 2023, as elevated energy costs increased expenses for consumers. Core inflation indicators have held steady near 2%, while fuel prices have declined following the onset of the conflict between the United States and Iran. RBC economists Nathan Janzen and Claire Fan noted in their analysis that the increase in oil prices has not yet translated into widespread or persistent inflationary pressures, following central bank observations that the energy price surge shows limited transmission to broader consumer costs. Following the June decision, the Bank indicated it would accommodate the short-term inflation uptick tied to the conflict but stood ready to respond should elevated energy costs trigger broader, sustained price increases. He also noted that additional trade restrictions from the United States might necessitate further reductions in interest rates. The Monetary Policy Report released in April forecast economic expansion of 1.2% alongside inflation reaching 2.3% for the year. The update scheduled for Wednesday is anticipated to modify both elements. The announcement is scheduled for 9:45 a.m. ET, with Macklem and Senior Deputy Governor Carolyn Rogers holding a briefing afterwards.