Bank of Canada Governor Tiff Macklem stated that permanent economic growth damage would result from tariffs because they decrease operational efficiency and reduce consumer spending. The central bank maintained its 2.75% interest rate while Macklem stressed that permanent economic damage would occur unless tariffs are eliminated.
The central bank officials monitor tariff-related disruptions because they want to prevent new inflationary pressures that have recently appeared in core inflation metrics. The underlying inflation rate measured through trimmed means and medians stays at approximately 3%.
The Bank presented three economic scenarios while promising flexible responses to ongoing uncertainty. The decision-making process continues one step at a time according to Macklem who places greater importance on risk assessment while monitoring core inflation rates.
