The Bank of Canada cut its benchmark interest rate by a quarter point as it warns trade uncertainty is already hurting the Canadian economy.

The move marks the central bank’s seventh consecutive interest rate cut and brings its key rate down to 2.75 per cent.

While inflation has been well-behaved and the economy was picking up speed heading into 2025, the Bank of Canada warns the tariff battle with the United States could change that in a hurry.

Bank of Canada governor Tiff Macklem says in prepared remarks that trade uncertainty was already causing “harm” to the economy before tariffs were imposed last week.

He says consumer and business confidence is already “shaken” as Canadians wait to see how the shifting trade war will resolve.

Macklem says the central bank will “proceed carefully” with further changes to interest rates as it weighs the impact of tariffs on inflation and growth.

The Bank of Canada’s next interest rate decision is set for April 16.