Bank of Canada lowers key interest rate but signals cuts may be done

OTTAWA - The Bank of Canada is signalling it might be done cutting interest rates in the short term but that doesn't mean economic growth is going to pick up quickly after a "structural" hit from U.S. tariffs.

The central bank lowered its benchmark interest rate to 2.25 per cent with a second consecutive cut on Wednesday.

Bank of Canada governor Tiff Macklem told reporters after the announcement that monetary policy-makers feel the key rate is at “about the right level” to keep inflation close to the bank's two per cent target while supporting the economy through tariff disruptions — provided the economy evolves in line with its forecasts.

Economists widely expected Wednesday’s cut as Canada’s economy shows cracks from U.S. tariffs but inflation appears largely under control.

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