On March 12, 2025, the Bank of Canada reduced its key policy rate by 25 basis points to 2.75%, marking the seventh consecutive rate cut in nine months. This decision aims to mitigate potential economic damage from recent U.S. tariffs imposed by President Donald Trump, including a 25% tariff on all steel and aluminum imports.
Governor Tiff Macklem expressed concerns about a “new crisis,” noting that the uncertainty from these tariffs is already harming consumer confidence and business investment. Canada has responded with $29.8 billion in retaliatory tariffs on U.S. goods, effective March 13.
The central bank plans to proceed cautiously with future rate changes, balancing the upward pressures on inflation from higher costs against the downward pressures from weaker demand. The trade conflict is expected to slow GDP growth and could disrupt the recovery in the jobs market.
Kelly Gares of BlueShore Financial shares their insights on Global News.
Watch the full video here: https://globalnews.ca/video/11078397/the-bank-of-canada-has-lower-its-key-interest-rate-again
