"New crisis": Bank of Canada cuts interest rate to 2.75% as Trump tariffs rattle economy | FULL

In a press conference on Wednesday, Bank of Canada governor Tiff Macklem said that threats of new tariffs and uncertainty about the Canada-U.S. trade relationship are having a big impact on business and consumer intentions.

The bank cut the lending rate by 25 basis points to 2.75 per cent amidst the ongoing trade war with the United States.

Macklem said that 2024 ended “on a solid footing”, but the country is now in a crisis, the depth of which is dependent on the new tariffs by President Donald Trump. He added that the impacts of these tariffs could be “severe.”

Macklem said that “given the pervasive uncertainty and unpredictability of U.S. trade policy,” he can not “put a number” on the inflationary impacts Canada could face shortly.

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