Bank of Canada Expected to Lower Interest Rate as U.S. Tariff Threats Escalate

Economists predict a seventh consecutive rate cut to counter economic uncertainty caused by U.S.-Canada trade tensions.

The Bank of Canada is widely anticipated to cut its benchmark interest rate by 25 basis points on Wednesday, bringing it to 2.75%.
This would mark the seventh consecutive rate reduction in response to economic risks stemming from U.S. tariff measures targeting Canadian imports.
President Donald Trump announced plans to double tariffs on Canadian steel and aluminum to 50%, adding pressure on the Canadian economy.
While Canada's fourth-quarter GDP growth exceeded expectations at an annualized 2.6%, economists warn that prolonged tariffs could lead to long-term structural damage to the economy.
Bank of Canada Governor Tiff Macklem has emphasized the need to support the economy, with economists suggesting further rate cuts could follow if trade uncertainties persist.