Macklem says economy undergoing structural change, plays down chance of further rate cuts
Bank of Canada Governor Tiff Macklem warned that further interest rate cuts could do more harm than good, arguing that easing policy to counter economic weakness risks stoking inflation and delaying necessary structural adjustment. Speaking in Toronto, he said Canada’s economy is undergoing a profound transformation driven by U.S. protectionism, artificial intelligence and slower population growth, which could weigh on growth for years and reinforces expectations that the central bank will hold its benchmark rate at 2.25% through 2026. Macklem urged businesses and policymakers to respond by diversifying trade, investing in new technologies and boosting productivity to strengthen long-term economic resilience.
