The Bank of Canada has lowered its interest rate 25 points down to three per cent.
It’s the sixth cut in a row by the central bank.
“Interest rate cut is always, generally, good news for consumers. It typically means easier access to financing through loans, maybe a break on your interest rates on your credit cards,” said Economic Development Lethbridge CEO Trevor Lewington.
While it’s good news for some, it does come with some uncertainty.
U.S. President Donald Trump has been threatening Canada with tariffs as high as 25 per cent as early as Feb. 1.
The Bank of Canada admits the current economic outlook is cloudy.
“The potential for a trade conflict triggered by new U.S. tariffs on Canadian exports is a major uncertainty. This could be very disruptive to the Canadian economy and is clouding the economic outlook,” said Bank of Canada governor Tiff Macklem.
The Bank of Canada likely wouldn’t have much power in preventing a recession if a trade war erupts.
Local business leaders are preparing the best they can for any potential economic challenges.
“The central bank will do its part. But other levels of government will also have to be keeping a keen eye and make policy changes as needed to try and soften the blow,” Lewington said.
While there’s still uncertainty, the lowered rate makes it a better time for potential homebuyers to get into the market.
After years of high rates brought on by the COVID-19 pandemic, the gradual rate cuts have made homebuying a more attractive option.
“I think we’re going to start seeing more people come out of the woodwork to potentially purchase now,” said James Rea, chair of the Lethbridge and District Association of Realtors.
The Bank of Canada will announce its next rate decision on March 12.
