The Bank of Canada will likely cut its benchmark rate by a quarter point on Wednesday to cushion the economy against U.S. tariffs, several economists said.

The Bank of Canada has cut its benchmark interest rate by 0.25 percentage points to 2.75 per cent, the lowest since July 2022. It is the seventh consecutive cut in the central bank’s monetary easing cycle as Canada’s inflation rate has been within policymakers’ target range of about 2 per cent.

The Bank of Canada cut interest rates by a quarter percentage point and called the trade battle with the US a “new crisis,” but pushed back on expectations that policymakers were on a predetermined cutting path.

The Bank of Canada has cut its overnight lending rate by 25 basis points to 2.75 per cent, it announced on Wednesday, as an ongoing trade war with the U.S. begins to strain the Canadian economy.