Bank of Canada cuts key rate 0.25% as easing cycle slows – National

The Bank of Canada delivered a sixth consecutive interest rate cut on Wednesday but slowed the pace of its easing cycle.

The central bank cut its benchmark interest rate by 25 basis points, bringing the policy rate down to 3.0 per cent. The move was widely expected by markets and most economists.

The quarter-point reduction marks a step down from the Bank of Canada’s moves to cut by an oversized 50 basis points in its two previous decisions.

The central bank shifted its monetary policy stance from tightening to easing last year amid signs inflation had come back under control and the slowing economy could use a boost.

While annual inflation cooled to 1.8 per cent in December, there were signs of stubbornness in metrics of core inflation that are closely watched by the Bank of Canada.

Heading into Wednesday’s decision, some economists argued that the threat of tariffs from the United States merited another rate cut from the Bank of Canada amid fears of a sharp hit to the Canadian economy if U.S. President Donald Trump were to pull the trigger.

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