Bank of Canada Lowers Interest Rate to 2.75% Amid Growing Trade Uncertainty

The Bank of Canada has reduced its benchmark interest rate by 0.25 percentage points, bringing it down to 2.75%—marking the seventh consecutive rate cut. The move comes as the central bank warns that escalating trade tensions, particularly with the United States, are already taking a toll on the Canadian economy.

Despite signs of economic recovery leading into 2025 and stable inflation, the Bank of Canada cautions that the ongoing tariff conflict could rapidly alter the country’s financial trajectory.

“Trade uncertainty was already causing harm to the economy before tariffs were imposed last week,” said Bank of Canada Governor Tiff Macklem in a prepared statement. He further noted that both consumer and business confidence have been “shaken” as Canadians remain uncertain about how the trade dispute will unfold.

Macklem emphasized that the central bank will “proceed carefully” when considering further rate adjustments, as it evaluates the potential impact of tariffs on inflation and economic growth.

The Bank of Canada’s next interest rate decision is scheduled for April 16, when policymakers will reassess economic conditions and determine the path forward.