Bank of Canada shifts monetary policy approach amid U.S. tariff uncertainty

Published 20/03/2025, 17:56
© Reuters.

Investing.com -- In response to the uncertainty over the impact of U.S. tariffs, the Bank of Canada announced on Thursday a shift in its approach to conducting monetary policy. The central bank will now adopt a less forward-looking stance than usual.

Governor Tiff Macklem explained that the bank’s focus will shift from policy for a specific outlook to one that is adaptable to varying outcomes. This change is aimed at minimizing the risk of potential missteps in predicting the economy’s trajectory, which could render the bank’s actions ineffective or even exacerbate economic issues.

During his speech to a business audience in Calgary, the hub of Alberta’s oil-rich province, Macklem emphasized the need for flexibility and swift action when situations become clearer. However, he refrained from providing specific details about the bank’s new policy approach.

While addressing the bank’s stance on inflation, Macklem assured that there would be no compromise on the bank’s commitment to maintaining low inflation. He stated that the bank would strive to prevent higher prices resulting from tariffs from spreading, although he did not elaborate on how this would be achieved.

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