Bank of Canada Plans Economic Forecast Amid US Tariff Concerns

The Bank of Canada plans to release new economic and inflation projections, following a period of uncertainty related to U.S. tariffs. With a reduced policy rate and key risks subsiding, the bank anticipates moderate economic growth, despite potential impacts from a trade agreement renegotiation among Canada, the U.S., and Mexico.

The Bank of Canada is preparing to unveil updated economic and inflation forecasts in its upcoming monetary policy report slated for October. This decision comes after a suspension in baseline estimates due to uncertainties surrounding U.S. tariffs under President Donald Trump.

Governor Tiff Macklem highlighted that the central bank reduced its policy rate to 2.5%, the lowest in three years, amid ongoing risks. With a 55% chance of another rate cut by October's end, the bank remains cautious, though it notes decreasing inflation risk thanks to diminished counter-tariffs on U.S. goods.

Despite these developments, the bank warns of slow economic growth exacerbated by weaker business investments and sluggish household spending, compounded by impending U.S.-Mexico-Canada trade negotiations. Nonetheless, consumption is expected to bolster economic stability in the near future.

(With inputs from agencies.)