Bank of Canada Slashes Interest Rates to Shield Economy
In response to rising economic uncertainty, the Bank of Canada reduced its key interest rate by 0.25 percentage points to 2.75%. This decision was made to cushion the economy from possible downturns caused by recent U.S. trade policies.
Why the Rate Cut?
• Canadian economic growth showed signs of slowing due to external trade pressures.
• Business investment has been declining, and consumer sentiment has weakened.
• Inflation remains under control, but higher import costs could push prices up in the future.
Market Impact
Following the announcement, the Canadian dollar weakened, while bond markets adjusted to the new rate environment. Analysts predict further monetary easing if trade conditions worsen.
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