Tariff uncertainty hangs over Bank of Canada’s 1st rate decision of 2025

By Craig Lord
Global News
January 27, 2025
Category: Finance & Economics
Region: Canada

The Bank of Canada is being pulled in a few different directions ahead of its first interest rate decision of the year on Wednesday. On one hand, there are signs of trouble bubbling up in underlying inflation that could make an argument for keeping borrowing costs higher for longer. On the other: Donald Trump has reiterated threats to impose tariffs of 25% on Canadian goods that could be set to take effect mere days after the central bank’s rate decision. …A trade blow like that would normally push the Bank of Canada towards steeper rate cuts in a bid to salvage economic growth. But dropping rates too quickly at a time when the loonie is already struggling risks fuelling more inflation on imports from the US. Economists say they’re betting the Bank of Canada will go ahead with another cut.

Read More