Bank of Canada Holds Rates, Warns of Hikes if Energy Inflation Persists

• Bank of Canada keeps benchmark interest rate at 2.25 percent, but signals readiness to hike if energy-driven inflation broadens.
• Governor Tiff Macklem states the central bank will 'look through' immediate West Asia conflict impact but act if price pressures persist.
• Economists warn prolonged energy route disruption could alter inflation and growth forecasts, with markets now betting on a potential rate hike by December.
• The central bank faces a dilemma: balancing inflation risks against a weakening economic backdrop, with near-term growth expected to underperform.
• Policymakers adopt a 'wait-and-watch' approach with a clear tightening bias, ready to respond to sustained inflation expectations.