OTTAWA — The Bank of Canada cut its benchmark interest rate by a quarter point today and is signaling it may be satisfied with where the policy rate stands amid ongoing U.S. trade uncertainty.
The central bank’s key rate now sits at 2.25 per cent after a second consecutive cut.
Bank of Canada governor Tiff Macklem says in prepared remarks that monetary policymakers feel that might be the right level to keep inflation close to the bank’s two per cent target while supporting the economy through tariff disruptions.
But that’s dependent on Canada’s economy evolving in line with a new outlook published by the central bank that expects weak growth through the second half of 2025 and a modest rise in the years after.
The Bank of Canada had not published a forecast since January in the face of U.S. trade uncertainty and Macklem says this new projection is subject to more risk than usual.
The central bank expects trade disruptions will structurally reduce the size of Canada’s economy and forecasts GDP will be 1.5 per cent lower by the end of 2026 than its projections before U.S. tariffs were imposed earlier this year.
This report by The Canadian Press was first published Oct. 29 2025.
Craig Lord, The Canadian Press
