Summary

The Bank of Canada lowered rates of interest in late January, easing the overnight rate by 25 basis points to three.00% (its sixth consecutive rate cut). The stimulus appears to be working, with the Canadian unemployment rate declining to six.6% in January from 6.9% late last yr, though still well above the 4.1% rate within the U.S. Meanwhile, trade uncertainty — after the Trump administration instituted broad-based tariffs on the U.S.’s northern (and southern) neighbor, ostensibly to rein within the flow of illegal drugs and to encourage more onshore manufacturing — has created a high level of uncertainty for those making economic forecasts. Probably the most-recent tariff salvo calls for 50% tariffs on Canadian steel and aluminum, and the potential for elevated tariffs on automobiles. For its part, Canada’s central bank, in lowering rates, said “if broad-based and significant tariffs were imposed, the resilience of Canada’s economy can be tested.” For now, many economists see economic growth in Canada falling to under 2% in 2025, despite expectations for one more 50 basis points of interest-rate reduc