Analyst: Tariff concerns outweigh inflation concerns, Canada's Central Bank has reason to cut interest rates next week

On January 21st, according to the data from Jinshi, Doug Porter, Chief Economist of Capital Markets at the Bank of Montreal in Canada, stated that President Trump’s threat to impose a 25% tariff on all Canadian imports from February 1st would exceed any concerns of the Canadian Central Bank policy makers about accelerating pump of basic prices. He said that the temporary sales tax holiday introduced last month “clearly slowed down overall inflation.” The 3-month annualized core data preferred by the Canadian Central Bank exceeded 3%, or was at the upper limit of the Central Bank’s target range. Porter said, “But we believe that the heavy shadow of trade uncertainty has almost overwhelmed everything else,” and believes that the Central Bank’s interest rate cut next week will be part of risk management.