The Bank of Canada has announced a 25 basis points reduction in its overnight lending rate, bringing it down to 2.75%. This decision comes in light of a strong start to the year with solid GDP growth, but growing tariff uncertainties with the U.S. have begun to impact business spending and consumer confidence. Governor Tiff Macklem emphasized that while the bank cannot eliminate the economic effects of tariffs, it can use interest rates to help manage inflation expectations, which have risen due to fears surrounding the tariffs.
Bank of Canada cuts its overnight lending rate to 2.75% amid economic uncertainty caused by U.S.-Canada tariff fluctuations impacting consumer confidence and business spending.
The central bank's decision responds to strong GDP growth, yet acknowledges business and consumer confidence are shaken due to ongoing trade war uncertainties.
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