‘Pervasive uncertainty’ caused by trade war prompts Bank of Canada to drop overnight lending rate to 2.75%

On March 12th, the Bank of Canada announced that it had lowered the target for the overnight lending rate by 25 basis points to 2.75%. This marks the seventh consecutive decrease to rates since June 2024. 

In its announcement, the Bank acknowledged that the Canadian economy had started the year on good footing. Now, with a trade war underway with the United States, the country is expected to see slower economic activity and increasing inflationary pressures in the months ahead, justifying the central bank’s decision to reduce its policy rate yet again. 

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