Bank of Canada Governor Tiff Macklem warned that elevated energy prices are making inflation more persistent, complicating policy as economic growth slows under renewed trade pressures. Canada’s Consumer Price Index is running at approximately 3%, above the Bank’s 2% target, while oil prices approach US$100 per barrel and supply disruptions lift fuel, heating and business costs. The policy rate is 2.25%, and Macklem said the Bank is prepared to raise it if inflation remains stubborn, although officials want to avoid unnecessarily weakening growth. New tariffs could cut fourth-quarter GDP growth to below 1% on an annualized basis, about half previous forecasts. The Bank is using analytical tools including the Prima model to distinguish temporary energy shocks from persistent inflation, while markets are watching the implications for bond yields and rate-sensitive sectors.