On Wednesday the Bank of Canada reduced its target for the overnight rate to 2.75 percent with the Bank Rate at 3 percent and the deposit rate at 2.70 percent.

The Canadian economy entered 2025 in a solid position, with inflation close to the 2 percent target and GDP growth.

The bank noted that heightened trade tensions and tariffs imposed by the United States will likely slow the pace of economic activity and increase inflationary pressures in Canada.