The BoC lowered its overnight rate by 25bps to 2.50% at today’s meeting, in line with widespread expectations. The move underscores the central bank’s effort to provide additional support as Canada’s economy struggles with weaker growth and softer inflation risks.
In its statement, the Governing Council said a “weaker economy and less upside risk to inflation” justified the cut, helping to better balance risks. The Bank highlighted that shifts in global trade continue to “add costs” even as they “weigh on economic activity.”
Looking ahead, policymakers said they will be closely monitoring how U.S. tariffs and evolving trade relationships affect exports, investment, employment, and household spending. They also flagged the risk that supply chain reconfiguration could pass higher costs onto consumers, stressing that inflation expectations remain a key guide for future decisions.
