The Bank of Canada is expected to hold its key overnight lending rate at 2.25% again Wednesday amid ongoing trade tensions with the U.S.

The BoC will announce its decision on Wednesday as Prime Minister Mark Carney’s government continues to negotiate a new Canada-U.S. trade with little sign of progress. The U.S. Federal Reserve is also expected to hold its key rate.

Economists are expecting BoC Governor Tiff Macklem after he signalled in December that the central bank would not change the overnight lending rate, either upward or downward, in the near future.

The BoC indicated in its last rate decision that it could lean towards holding rates because it was satisfied with how the economy was performing due to considerable uncertainty due to trade tensions with the U.S.

Bloomberg reported that markets and economists it surveyed expect the BoC to keep the policy rate at 2.25% for the second-consecutive meeting.

The decision comes after U.S. President Donald Trump threatened recently to impose 100% tariffs on imports from Canada if Carney signs a free-trade deal with China. Carney has countered that he has no intention of doing so.

Trump issued the threat after Canada signed an EV-trade deal with China, lowering tariffs on Chinese EV imports to 6.1% from 100%. However, Trump had expressed support for the Canada-China EV-trade deal after it was announced.

Veronica Clark, an economist with Citigroup, told Bloomberg that she expects “more of the same” from the BoC.

“They were pretty unclear on if the next move is hike or cut, and I doubt anything will have convinced them either way yet,” she told her interviewer.

Avery Shenfeld, CIBC’s chief economist, told The Canadian Press that none of the economic data issued since the BoC’s December hold was surprising enough to alter the central bank’s stance.

“It looks like the economy seems to have decelerated again in the fourth quarter, inflation is not materially diverging from the Bank of Canada’s objectives, and the unemployment rate is still too high for comfort,” Shenfeld told The Canadian Press.

Once a central bank reaches the end of its interest-rate path, it usually holds the policy rate there for a year or more, said Shenfeld in his interview with The Canadian Press.

Shenfeld anticipates that Macklem could signal that no hikes are forthcoming this year.

Meanwhile, LSEG Data & Analytics anticipates that a hold will receive 93% support from central bank officials during the BoC’s meeting this week.

“When markets hear from a central bank that they’re done easing, they start to say, ‘Well, the next move must be a hike and let’s start to put in some probability of it,’” he told his interviewer.

Shenfeld anticipates that some prospective homebuyers could move off the sidelines if they think mortgage interest rates will stay put. And, the BoC could change its stance if the Canadian economy suffers an unexpected shock.

Macklem has said that the BoC could base its rate decisions on economic shocks rather than conventional economic trends in the future.

Macklem has warned that BoC rate policy may change to offset economic shocks rather than follow conventional trends. In October, the BoC resumed its practice of issuing an economic forecast with its rate decision after taking the rare step of not issuing an outlook for a number of months.

“Trade by far is still the biggest cloud on the horizon, and the one that might end up compelling the Bank of Canada to get off of its stand-pat stance and actually ease more if the trade barriers worsen,” Shenfeld told The Canadian Press.

The BoC is expected to issue an economic forecast and inflation outlook in conjunction with its rate announcement.

Pictured: Bank of Canada Governor Tiff Macklem

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