Canada Bank reduces interest rates, warns the commercial conflict “will harm” Business and Economics News

Bank of Canada’s governor has warned that the war of tariffs with the United States will harm the economic activity in Canada.

Canada Bank has reduced the main policy price by 25 basis to 3 percent, which reduced growth forecasts and the Canadians warned that the US tariff war caused by the United States could cause significant economic damage.

“The long -term trade conflict and the wide of al -Qaeda will hurt the economic activity in Canada,” Governor Tif Maclim said at the opening of notes at a press conference on Wednesday. The possibility of such a war is to overcome the economic view.

US President Donald Trump promised to impose a 25 percent tariffs for all imports from Canada on saturday. Canada sends 75 percent of all exports of goods and services to the United States.

The bank said that if Canada and other countries slapped a 25 percent revenge tariff for the United States, this may lead a virtual scenario.

Wednesday, the sixth consecutive consecutive reduction in which the bank has reduced borrowing costs. The inflation remained constantly around the mid-target range of the bank 1-3 percent, but economic growth is still slow.

“With inflation about 2 percent and the extra economy, the Governing Council decided to reduce the price of policy by 25 points to 3 percent,” the bank said in a statement.

The Canadian dollar fell 0.3 percent to 1.44 against the US dollar after the decision.

A difficult situation

Capital markets sees an opportunity for more than 43 percent to reduce the 25th Passis points in announcing the upcoming BOC monetary policy decision on March 12.

“The Bank of Canada will be in a difficult situation, but our view is that it will become more aggressive in terms of price cuts if this (US tariff) is what we face,” said Doug Porter, the chief economist at BMO Capital Markets. .

The bank’s challenge is that American definitions may increase inflation – theoretically, which leads to the need for high rates – and also to reduce growth, which can mean more stimulation in the form of lower rates.

“With one tool – our policy interest rate – we cannot tend to the weakest production and high inflation at the same time,” said McLim. He said that the bank can help the economy adapt, especially given that inflation is low.

The bank has also announced that the quantum tightening program, designed to drain the extra liquidity that it pumped into the economy during the epidemic, will end in March.

BOC, which was among the best aggressive central banks in reducing prices, reduced the country’s economic growth expectations to 1.8 percent in 2025 from 2.1 percent expected in October. The economy will grow by 1.8 percent in 2026, a decrease from 2.3 percent growth earlier.

The Central Bank raised its forecast for inflation to 2.3 percent of 2.2 percent in 2025 and 2.1 percent out of 2 percent for 2026. The expectations are not taken into account the potential American definitions.

The Canadian economy was shrinking on the basis of every sixth -quarters, and most of the growth that was observed through the population increased was supported.

With the federal government New restrictions on immigrationCanada is likely to see a decrease in the population by 0.2 percent in both 2025 and 2026.