Hamilton, ON, Mar. 10, 2025 – The Bank of Canada will announce its decision on the country’s key interest rate on Wednesday, a move that could have significant implications for the economy as Canada navigates a trade war with the U.S.

“With a weak February jobs report and continuing uncertainty around Trump’s on-again-off-again tariffs, the Bank of Canada will want to send a clear signal that they are ready to support the Canadian economy with lower interest rates,” says Colin Mang, assistant professor of economics. “With all the trade uncertainty, cutting interest rates will put a little bit more money into the pockets of Canadian families to help them through the challenging months ahead.”

Mang says the prospect of a full-blown trade war is causing businesses to think twice about new investments.

“A rate cut will help Canadian business owners in this difficult time and encourage more investment to grow the Canadian economy. A further rate cut will put downward pressure on the Canadian dollar, making our goods cheaper internationally and supporting Canadian exporters, many of whom are scrambling to find new customers globally.”

Colin Mang can be reached at: colinmang@mcmaster.ca