The Bank of Canada held its overnight rate at 2.25% for a sixth consecutive decision, even as Canada's inflation cooled to 2.8% in June from 3.2% the month before, undershooting the 2.9% consensus forecast. The Bank still revised its inflation outlook higher, leaning on elevated headline risk to justify caution. The hold comes as the US Federal Reserve, under new chair Kevin Warsh, has dropped forward guidance ahead of its July 28-29 decision, leaving the policy rate gap between the two central banks near 125 to 150 basis points.
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