In a strategic move to navigate through economic uncertainties, the Bank of Canada has reduced its benchmark interest rate by 25 basis points, bringing it down to 3%. This decision comes at a time when Canada is bracing for potential tariffs from the United States.
The central bank highlighted \"more-than-usual uncertainty\" in its latest outlook report, attributing it to the rapidly changing policy landscape and the looming threat of trade tariffs from the new US administration.
Additionally, the Bank of Canada has lowered its growth projections for 2025 and 2026, signaling cautious optimism.
\"In the absence of new tariffs, growth is forecast to strengthen, and inflation remains close to 2 percent. But the threat of new tariffs is causing major uncertainty,\" the central bank stated.
Despite recent positive discussions with US Secretary of State Marco Rubio, Canadian Foreign Minister Melanie Joly mentioned that the implementation of the proposed tariffs remains unclear. \"Canada is ready to retaliate if necessary,\" Joly affirmed during a briefing streamed on Global News.
Last week, US President Donald Trump indicated intentions to impose a 25% tariff on all Canadian imports starting February 1, as reported by CNN. However, the White House has yet to release an official statement confirming these rates.
