Bank of Canada cuts interest rates, warns that business struggle will ‘hurt’ business and economy news
The Governor of the Bank of Canada warned that a tariff war with the US would hurt economic activity in Canada.
Bank of Canada (BOC) has trimmed its major policy rate to 3 percent to 3 percent, cut development forecasts and warned Canadians to warn people that a big economic loss from a tariff war triggered by the United States Might be possible.
Governor Tiff McCalem on Wednesday asked to start a comment at a news conference, “A long-lasting and wide-based trade struggle will hurt economic activities in Canada badly.” The possibility of such war is giving clouds to the economic approach.
US President Donald Trump is promising to impose 25 percent tariffs on all imports from Canada on Saturday. Canada sends 75 percent of the export of all goods and services to the US.
If Canada and other countries slap 25 percent of tariffs on the US, then the Canadian growth may increase by 2.5 percent in the first year and there may be another 1.5 percent marks in the second year, the bank said, it is a forecast Was not, but it was not a forecast, but it was not a forecast but a fictional landscape.
Wednesday’s deduction marked the sixth time in a line that the bank has reduced the cost of lending. Inflation has been continuously around the middle-point of the bank’s 1-3 percent target limit, but economic growth is still sluggish.
The bank said in a statement, “With the economy in more supply with inflation, the Governing Council decided to reduce the policy rate.”
The Canadian dollar was down 0.3 percent at 1.44 against the US dollar after the decision.
Difficult situation
Money markets look at the BOC’s next monetary policy decision on March 12, more than 43 percent of the possibility of the 25-basis-point cut.
BMO Capital Markets Chief Economist Dug Porter said, “Bank of Canada will be in a difficult situation, but our view is that they will become more aggressive in terms of rate cuts if (US tariffs) we are facing, “The chief economist of BMO Capital Markets, Dug Porter, said. ,
The bank’s challenge is that both US tariffs can increase inflation – in principle, by inducting the need for high rates – and also cuts development, which may mean more stimulation in the form of low rates on paper. Is.
“With a tool – our policy interest rate – we cannot bend against weak production and high inflation at the same time,” McCalem said. Although the bank can help adjust the economy, especially given that inflation is low, he said.
The bank also announced that its quantitative tightening schedule, designed to eliminate additional liquidity pumped into the economy during epidemic, would end in March.
The BOC, which has been one of the most aggressive top central banks in rate cuts, led the country’s economic growth approach to 1.8 percent of the country’s economic development approach in October 2025. The economy will increase by 1.8 percent in 2026, the first 2.3 percent below forecast.
The Central Bank increased its forecast for inflation in 2025 to 2.2 percent to 2.3 percent and 2026 from 2 percent to 2.1 percent. Estimates are ignored on possible American tariffs.
The Canadian economy is shrinking per capita per capita for six quarters of the Canadian economy and has supported the increase in population.
With the federal government’s new curb on immigration, Canada is expected to see a decline of 0.2 percent in both 2025 and 2026.
