The Bank of Canada has reduced its key policy rate to 2.75 percent while highlighting inflationary pressures from tariffs and the potential impact of trade uncertainties. Governor Tiff Macklem emphasized the importance of carefully assessing both inflationary and demand pressures before any further rate adjustments. Despite reducing rates multiple times recently, the central bank remains noncommittal on future guidance as Trump's tariff policies create economic instability, raising concerns about GDP growth and high prices that complicate decision-making on monetary policy.
We're focused on weighing those downward pressures and those upward pressures. Our job is to maintain price stability, and that's what we're focused on, Governor Tiff Macklem told a news conference.
Trump's stop-start tariff policies and threats to a wide range of Canadian products have alarmed companies, shaken consumer confidence and hurt business investment.
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