Bank of Canada Cuts Rates, Prioritizing Survival Over Inflation Control
The Bank of Canada (BoC) cut its overnight rate by 25 basis points to 2.25%, citing weak investment and falling demand.
The BoC warned that monetary policy won’t fix the current headwinds, but expects economic erosion to control inflation.
Apparently, the inflation mandate has been outsourced to economic devastation, and a resilient economy means life is about to get much more expensive.
- GDP contracted 1.6% in Q2, driven by a shock to exports
- Weak business investment due to economic uncertainty, primarily around tariffs
The central bank cited eroding economic factors as the primary support for rate cuts.
Author's summary: Bank of Canada cuts rates to 2.25%.
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