On February 13th, the minutes of the January monetary policy meeting released by the Bank of Canada showed that the management committee unanimously believed that the ongoing trade conflict with the United States would permanently reduce Canada’s gross domestic product level. In this situation, Canada’s gross domestic product (GDP) growth will be suppressed until the economy adapts to tariff policies. A 25 basis point interest rate cut will help support economic growth and better balance inflation risks. The increased uncertainty brought about by the threat of US tariffs also supports the reason for interest rate cuts.
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