"The Bank of Canada lowered interest rates to 2.25 per cent on Wednesday, but cautioned that monetary policy can't fix the structural economic damage caused by the U.S. trade war. The central bank said it made the 25-basis-point cut as weakness ripples through the Canadian economy and with inflation expected to stay close to the bank's two per cent target."
""For many months, we have been stressing that monetary policy cannot undo the damage caused by tariffs," said Bank of Canada governor Tiff Macklem during a news conference in Ottawa. The economy has been saddled with higher costs and less income as a result of the U.S. trade war. While the central bank's monetary policy can help the economy adjust to these circumstances, "it cannot restore the economy to its pre-tariff path," he said."
Bank of Canada lowered its policy interest rate by 25 basis points to 2.25 per cent, citing weakness spreading through the Canadian economy and inflation expected to remain near the two per cent target. The central bank warned that monetary policy cannot undo structural damage caused by U.S. tariffs and cannot restore the economy to its pre-tariff path. The Bank said it will hold rates if inflation stays in line with current expectations but is prepared to respond if the outlook changes. The Monetary Policy Report said the trade conflict is fundamentally reshaping the economy, with weak growth, a second-quarter contraction, falling exports, reduced investment, and a slowing labour market with thousands of job losses influencing the decision.
Read at www.cbc.ca
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