US monthly new residential construction, August 2025

The Bank of Canada today reduced its target for the overnight rate by 25 basis points to 2.5%, with the Bank Rate at 2.75% and the deposit rate at 2.45%. After remaining resilient to sharply higher US tariffs and ongoing uncertainty, global economic growth is showing signs of slowing. In the United States, business investment has been strong but consumers are cautious and employment gains have slowed. US inflation has picked up in recent months as businesses appear to be passing on some tariff costs to consumer prices. Growth in the euro area has moderated as US tariffs affect trade. China’s economy held up in the first half of the year but growth appears to be softening as investment weakens. Global oil prices are close to their levels assumed in the July Monetary Policy Report (MPR). Financial conditions have eased further, with higher equity prices and lower bond yields. Canada’s exchange rate has been stable relative to the US dollar. Canada’s GDP declined by about 1½% in the second quarter, as expected, with tariffs and trade uncertainty weighing heavily on economic activity. Exports fell by 27% in the second quarter, a sharp reversal from first-quarter gains when companies were rushing orders to get ahead of tariffs. Business investment also declined in the second quarter. Consumption and housing activity both grew at a healthy pace. In the months ahead, slow population growth and the weakness in the labour market will likely weigh on household spending. Employment has declin BOC Says Rate Cut Appropriate Due To Weak Economy and Lower Inflation Risk, Monthly Core Inflation Gains Have Gone Away Earlier This Year Bank of Canada Promises To Sustain Economic Growth And Keep Inflation Under Control, While Ottawa Removes U.S. Import Tariffs To Reduce Price Increases BoC: Proceeding carefully, with focus on risks, uncertainties BoC removes forward guidance on rate cuts from policy statement.

Good morning. I’m pleased to be here with Senior Deputy Governor Carolyn Rogers to discuss today’s monetary policy decision. Today, we lowered the policy interest rate by 25 basis points, bringing it to 2.5%. Through the recent period of trade upheaval, Governing Council has been proceeding carefully, paying particular attention to the risks and uncertainties facing the Canadian economy. Three developments have shifted the balance of risks since our July decision. 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 risks going forward. The Bank will continue to assess the risks, look over a shorter horizon than usual, and be ready to respond to new information. Macklem Says There Was a Clear Agreement To Lower Interest Rates Macklem Says Risks and Uncertainties for the Economy Have Changed Since July Bank Of Canada Governor Macklem Says Bank Will Focus On Shorter Time Horizon and Prepare To Respond To New Data BoC's Gov. Macklem: Cut appropriate with a weaker economy, less inflation risk.