Bank of Canada cuts interest rate to 2.25%, but signals this may be the end of easing

Central bank releases first economic forecast since January

The Bank of Canada cut its interest rate by 25 basis points to 2.25 per cent on Wednesday, but signalled that it may end its easing cycle there if the economy performs in line with its forecast.

“This was our second straight cut, and reflects ongoing weakness in the economy and contained inflationary pressures,” said Bank of Canada governor Tiff Macklem in prepared remarks.

“If the economy evolves roughly in line with the outlook in our MPR, governing council sees the current policy rate at about the right level to keep inflation close to two per cent while helping the economy though this period of structural adjustment.”

The central bank also unveiled its first baseline forecast since January after trade war uncertainty p