Wednesday June 4, 2025 | NATIONAL ECONOMIC NEWS – reporting from VICTORIA, BC
by Mary P Brooke | Island Social Trends
In a time of uncertainty in the economy, it was probably a surprise to few people that the Bank of Canada today has maintained its target for the overnight rate at 2.75%.
“We are proceeding carefully and what that means is that we’ll be less forward-looking than usual,” said Bank of Canada Governor Tiff Macklem in today’s live media availability.
“There’s not a single data point that we look at,” said Deputy Governor Carolyn Rogers. A lot of weight is being put on soft intel from businesses, she said, referring to the cost of holding inventory and other business responses to tariff uncertainty.
Macklem said that more uncertainty is injected into Canada’s economic picture from the US economic tariff challenge than the federal government’s budget might be.
“Uncertainty delays investment and makes households more cautious,” said Macklem. “It’s very difficult for everyone.”
Canadian businesses are looking for new suppliers and new markets, and those things have costs.
“If uncertainty and tariffs continue and the cost pressures coming through on inflation are contained, there could be a further need for a reduction in our central interest rate,” said Macklem.
If Canada can get a renewed trade agreement with the United States… that will help everyone get on with the decisions … that will reduce uncertainty and you’ll see some rebound in activity.”
“The sooner that happens, the better,” he added.
“We will support economic activity while ensuring that inflation is well controlled,” said Macklem.
“Canada’s economy is always going to be concentrated in the United States, just look at a map,” said Macklem, while saying that trade diversification will help both internationally and domestically.
“You need to keep in mind the level of uncertainty and the amount of volatility,” said Rogers. “We didn’t see market dysfunction which means there are a certain amount of buffers to deal with uncertainty.”
Macklem commented on the forest fires in western Canada and hopes they are brought under control and thanks and salutes the firefghters that are doing their best to do that. “The wildfires are having an economic impact,” he said.
Next interest rate announcement in July:
The next interest rate announcement comes up on July 30, as part of the 2025 rate announcement schedule:
- Wednesday, January 29
- Wednesday, March 12
- Wednesday, April 16
- Wednesday, June 4
- Wednesday, July 30
- Wednesday, September 17
- Wednesday, October 29
- Wednesday, December 10
===== RELATED:
NEWS SECTIONS: BANK OF CANADA | BUSINESS & ECONOMY | TARIFFS & TRADE