The Bank of Canada is expected to keep interest rates unchanged on Wednesday. Recent data shows the economy is moving mostly as the central bank had expected. This is happening even as some industries face pressure from US tariffs.

Governor Tiff Macklem has already signaled this pause. He said borrowing costs are now at a comfortable level. This followed a 25 basis point rate cut in late October. He made it clear that rates will stay where they are unless the economic picture changes in a big way.

That message has shaped market expectations. Most investors now believe no move is coming in the near term.

Last month, the central bank kept its key rate at 2.25 percent. Officials see this level as neutral. It is neither pushing the economy harder nor slowing it down.

The bank has said its current policy is well balanced. Inflation is staying close to the 2 percent target. As long as the economy behaves as expected, there is no urgent need to act.

Officials have also kept the door open. They say they are not locked into any path. If growth weakens or inflation pressures return, they are ready to respond.

Inflation data has been mostly reassuring. Overall price growth is staying near target. Some spare capacity in the economy is helping absorb higher costs linked to trade changes.

Still, inflation under the surface remains a bit sticky. This suggests the cooling process is not fully finished yet.

The impact of US tariffs has been limited so far. Only a few sectors are feeling real pressure. These include autos, steel, and lumber.

Most of the economy has been spared. One reason is the continued operation of the North American trade agreement. It has helped keep trade flowing in other areas.

Because of this, tariffs have not caused a broad slowdown yet.

Surveys and markets are pointing in the same direction. A large majority of economists expect rates to stay unchanged through 2026. This number has risen sharply in recent months.

Market pricing tells a similar story. Investors see rates staying on hold or easing slightly into mid 2026. Any tightening is expected to come only later and very gradually.