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Bank of Canada Cuts Rate to Lowest Point in Three Years
As widely anticipated, on September 17th, 2025, the Bank of Canada reduced its policy interest rate by 0.25%, bringing it down to 2.50%. The lowest level in more than three years.
The decision to lower the policy rate was driven by three key developments, according to Tiff Macklem, Governor of the Bank of Canada, which have “shifted the balance of risks” from the previous meeting in July.
“First, Canada’s labour market has softened further.”
“Second, although there are still some mixed signals, on balance, recent data suggest the upward pressures on underlying inflation have diminished.”
“Third, with the removal of most retaliatory tariffs by Canada, there is less upside risk to future inflation.”
“Considerable uncertainty remains. But with a weaker economy and less upside risk to inflation, Governing Council judged that a reduction in the policy rate was appropriate to better balance the risk going forward.”
– Tiff Macklem, Governor of the Bank of Canada
In the attached info guide, we discuss what the recent rate drop could mean for you, why the Bank of Canada decided to lower rates, and what might be next for the Bank of Canada.
We hope you find this guide helpful. If you would like any additional details about the recent Bank of Canada decision or forecasts, or to review any specific rate/product options given the current interest rate outlook, please let us know, as we’d be happy to help.
