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BoC Holds Rate at 2.25% as War Fuels Inflation

The Bank of Canada kept its benchmark interest rate steady at 2.25% on Wednesday, marking the fourth consecutive hold since a 0.25% cut in October 2025, as the ongoing war in Iran, now in its third month, drives energy price spikes and global economic uncertainty.

Governor Tiff Macklem acknowledged the challenging landscape, pointing to geopolitical tensions and volatile financial conditions shaped by daily developments in the Middle East. “Canada is being buffeted by global events and geopolitical uncertainties, but our economy is growing and is expected to grow,” Macklem said in prepared remarks.

The central bank highlighted the Iran conflict as a primary driver of economic strain, with Iran’s blockade of the Strait of Hormuz—a critical passage for 20% of global oil supply—and strikes on Persian Gulf energy sites pushing Brent crude to $109 per barrel.

You can read more on the matter here.

What’s going on?

• Unaired Part of CBS Interview Says Trump Framed Wounded Agent Care As Media Optics (theDeepDive)

• South Korea sweetens submarine bid, will manufacture armoured vehicles in Canada if chosen (CTV)

• Australia’s NSW Opens New Gas Exploration Areas, Slashes License Fees from $50,000 to $1,000 (theDeepDive)

• US war in Iran has cost $25 billion so far, says Pentagon official (Reuters)

• A Shooting at the Correspondents’ Dinner Finds Trump at His Lowest Approval Yet (theDeepDive)

• U.S. ambassador to Ukraine steps down due to frustration with Trump, reports say (Globe)

• Appalachia Is Sitting on Enough Lithium for 328 Years of America’s Battery Needs (theDeepDive)

• Jimmy Kimmel Mocks Trump Again After FCC Opens Review of ABC TV Licenses (WSJ)

• Iran Claims It Transferred 15 Unexploded US Weapons for Reverse Engineering, Including Intact GBU-57 (theDeepDive)

What’s the latest?

• Energy: Oil prices surged with Brent June crude up 7.3% to ~$119.34 (peaking $119.76) and July Brent at $111.27 (+6.6%), marking a >10% weekly gain as the U.S.-Iran conflict disrupts supply via the Strait of Hormuz. Despite the spike, U.S. equities remain near record highs, showing limited reaction even as the blockade by Donald Trump and Iran’s countermeasures constrain global oil flows.

• Tech: Canada’s telecom complaints surged 61% YoY to 19,157 cases (Aug 2025–Jan 2026), led by wireless issues (56%), with billing complaints up 66% and activation/installation fees a key pain point, according to the Commission for Complaints for Telecom-Television Services. Rogers led with 6,583 complaints (+95.4%), followed by Telus (3,078, +31.4%) and Bell (2,505, +26%), as regulators move to ban certain fees starting June 12.

• Markets: Canada’s S&P/TSX fell 228.99 points to 33,355.35 despite oil rising to $105.31/barrel (+$5.38), while U.S. markets also declined (Dow -273.72, S&P 500 -8.74, Nasdaq -11.58). The Canadian dollar was flat at ~73.10 US cents, and gold dropped $51.10 to $4,557.30, as stalled Middle East peace talks weighed on sentiment.

• Real Estate: U.S. 30-year mortgage rates rose to 6.45% (+7 bps, highest since April 3) as oil prices and bond yields climbed following President Donald Trump’s decision to maintain the Iran blockade. Despite higher rates, mortgage applications increased 1% WoW and 21% YoY, suggesting resilient demand amid rising supply and easing home prices.

• Politics: Donald Trump escalated rhetoric toward Iran with a social media threat amid stalled talks and a continued Strait of Hormuz blockade, while rejecting Tehran’s proposal to reopen the route in exchange for ending the war. Oil prices rose further, with WTI at ~$102.75 (+2.82%) and Brent at ~$114.62 (+3%), as supply concerns intensified alongside the United Arab Emirates’s planned exit from OPEC.

The Forces Driving Gold Higher Are Not Going Away

The stock market and stuff

• First Quantum Raises Guidance Despite Wider Loss In Q1 2026 (theDeepDive)

• Record Gold Prices and Tariffs Gut US Jewellery Demand in Q1 (theDeepDive)

• Oil jumps to almost $120 as Trump signals extended Hormuz stand-off (FT)

• Central Banks Ramp Up Gold Purchases to 244 Tons in Q1 Amid Price Slump (theDeepDive)

• Gold Demand Hits Record Value in Q1 as China Hoards, Turkey Sells (theDeepDive)

In the juniors

• Guanajuato Silver’s Q4 Revenue Climbs to $22.7M as Production Rises Across the Board (theDeepDive)

• Cabral Gold Advances Cuiu Cuiu Project To 70% Completion (theDeepDive)

• Mercado Drills 256 g/t Silver Over 6.5 Metres In First Drill Hole of Inaugural Program (theDeepDive)

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