The Bank of Canada in Ottawa. Photo by Kamara Morozuk / Bloomberg

(Bloomberg) — The Bank of Canada cut interest rates as it sees damage from US tariffs persisting, but signaled borrowing costs are at the right place as long as the economy grows roughly in line with its forecasts.

Officials led by Governor Tiff Macklem lowered the benchmark overnight rate by 25 basis points for a second consecutive meeting on Wednesday, bringing the policy rate to 2.25%, the lowest since July 2022.

The central bank also slashed growth projections, painting a downbeat picture of the economy. In prepared remarks, Macklem called the trade conflict with the US a “structural transition” that has “diminished Canada’s economic prospects.”

But the central bank pushed back on expectations of further easing,

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