03/13/2025
The Bank of Canada has lowered its target for the overnight rate to 2.75%, citing ongoing economic uncertainty. While Canada entered 2025 with strong GDP growth and inflation near the 2% target, heightened US trade tensions are expected to slow activity and increase inflationary pressures. The US economy has shown signs of slowing, while Chinaโs growth remains strong due to government support. Canadaโs economy grew by 2.6% in late 2024, boosted by past rate cuts, but trade conflicts are dampening consumer confidence and business investment. Employment growth was strong through January but stalled in February, with wage growth moderating. Inflation remains close to target, though short-term expectations have risen due to tariff concerns. The Bank acknowledges that monetary policy cannot counteract a trade war but aims to maintain price stability. The next rate announcement is scheduled for April 16, 2025.
