Bank of Canada expected to cut benchmark rate to buffer economy against tariffs

OTTAWA — The Bank of Canada is expected to announce an interest rate cut today as a cloud of uncertainty looms over the Canadian economy.

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Economists polled by Reuters widely see the central bank lowering its key lending rate to 2.75 per cent, which would mark its seventh consecutive cut.

The decision comes as a trade war between Canada and the U.S. continues, dampening consumer and business confidence.

The trade spat puts the Bank of Canada in a difficult position as tariffs will likely result in a hit to economic growth, but it could also lead to a flare in inflation.

Most economists believe though that the bank will opt to deliver a rate cut to cushion the economy against tariffs.

U.S. President Donald Trump’s tariffs first came into play March 4, with Canada responding with its own retaliatory duties, but have gone through several changes and revisions since.

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