The Bank of Canada on Wednesday cut its key interest rate, a move that comes just hours after U.S. President Donald Trump issued new steel and aluminum tariffs against Canada.
The central bank cut its benchmark rate by 25 basis points, bringing it down to 2.75 per cent. This was the bank’s seventh consecutive interest rate cut.
Bank of Canada governor Tiff Macklem said in a statement Wednesday that while Canada’s economy had entered 2025 on “solid footing,” with inflation remaining close to the bank’s two per cent target rate since last summer, Trump’s tariffs pose a new challenge.
“In recent months, the pervasive uncertainty created by continuously changing US tariff threats has shaken business and consumer confidence. This is restraining household spending intentions and businesses’ plans to hire and invest,” Macklem said.
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