BoC’s March 12 Summary of Deliberations revealed that the decision to cut the policy rate by 25 bps to 2.75% was driven primarily by “tariff threats and elevated uncertainty”.
Governing Council members acknowledged that, under normal circumstances, holding the rate at 3% would have been appropriate. However, the impact of steel and aluminum tariffs, additional tariff threats, and the unpredictable stance of the US administration had begun to materially affect business and consumer decisions. This was “significantly weakening the near-term outlook”.
Looking ahead, BoC emphasized the complexity of the situation and the fluid nature of trade tensions. “It would not be appropriate to provide guidance on the future path for the policy interest rate,” the minutes noted.
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