If U.S. tariffs trigger a global trade war, inflation in Canada would spike and the country would enter a deep recession, according to a Bank of Canada scenario released on Wednesday.

The Bank of Canada recently held its interest rate at 2.75% and does not want to change it amidst US tariffs. While this may not seem significant, the bank of Canada has cut interest rates every year for the past seven years.

The Bank of Canada doesn't know quite yet how to navigate monetary policy amid constantly shifting trade turbulence with the United States, so the central bank kept its powder dry with an interest rate hold on Wednesday.