The Bank of Canada announced a 50 basis point reduction of its key interest rate, warning that Canada’s economic outlook sees increased uncertainty due to the threat of tariffs by the incoming U.S. administration.
The central bank reduced the policy rate from 3.75 percent to 3.25 percent on Dec. 11, the fifth consecutive rate cut since June 2024. While the bank said these cuts have successfully brought inflation back down to around its 2 percent target, several factors have led it to believe economic growth in 2025 may be lower than forecasted.
