Bank of Canada cuts interest rate over Trump’s tariff threat
Canada's central bank reduced its interest rate by half a percentage point on Wednesday and urged Donald Trump not to impose tariffs on Canadian imports.
This marks the fifth consecutive rate cut since June, bringing the central bank’s interest rate down to 3.25%.
Governor Tiff Macklem said in a press release that the bank opted for two significant consecutive rate cuts because inflation and economic growth no longer require active restraint. Inflation in Canada has stabilized at 2%, and the bank is now focused on maintaining that level.
However, the central bank remains wary of Donald Trump's threat to impose a 25% tariff on Canadian goods.
"The possibility the incoming U.S. administration will impose new tariffs on Canadian exports to the United States has increased uncertainty and clouded the economic outlook," the bank said in a statement.
"We did underline that the threat of new tariffs on Canadian exports, particularly at the level suggested, that is a major source of new uncertainty. But the reality is we don't know if those tariffs are going to be implemented," Tiff Macklem said at a press conference.
(QG - Source: The Independent / Picture: © Unsplash)