As the tariff threat looms, the Bank of Canada lowered its interest rate again.
The 25 basis point reduction is the sixth straight decrease, and brings it to three percent.
Governor Tiff Macklem says the U.S. tariffs are clouding the economic outlook.
“We don’t know what new tariffs will be imposed, when, or how long they will last. We don’t know retaliatory measures or what fiscal supports will be provided,” said Macklem.
He adds a long-lasting trade conflict would badly hurt the economy, and the higher cost of imports would put upward pressure on inflation.
Macklem says the policy report is an outlook in the absence of tariffs.
Bank of Canada reduces policy rate by 25 basis points to 3%, announces end of quantitative tighteninghttps://t.co/5mj02qT1AO#economy #cdnecon
— Bank of Canada (@bankofcanada) January 29, 2025
