Key Highlights
- The Bank of Canada has decided to cut interest rates by 25 Bps, lowering it to 2.25%
- The main factor behind this rate cut was the ongoing tariff war between the U.S. and Canada, causing “structural damage”
- Major cryptocurrencies have witnessed a dip ahead of Jerome Powell’s speech, as the U.S. Fed is also planning to cut interest rates
Amid the ongoing downward momentum in the cryptocurrency market, the Bank of Canada has reportedly decided to lower interest rates to 2.25% with a cut of 25 Bps. This is the major cut in the second consecutive meeting.
Bloomberg reports that the Bank of Canada cut its benchmark overnight interest rate by 25 basis points for the second consecutive meeting, lowering it to 2.25%, the lowest level since July 2022. Governor Tiff Macklem stated the move addresses ongoing economic damage from U.S.…
— Wu Blockchain (@WuBlockchain) October 29, 2025
This announcement comes during the dipping valuation of major cryptocurrencies like Bitcoin and Ethereum, which have crashed by 3% and 4.49% in a day, respectively, according to CoinMarketCap.
Bank of Canada Lowers Interest Rates
The Bank of Canada has decided to reduce interest rates. This is the ninth consecutive cut since the rate peaked at 5% in June 2024 and the second straight reduction following the September decision.
However, this cut was already expected by most economists. The decision was made public today, along with the release of the Monetary Policy Report. This was announced in a press release featuring Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers.
In the official statement, the Bank of Canada cited ongoing economic weakness and inflation data near the 2% target as the primary reasons for the cut. Inflation stood at 2.4% in September, up slightly from 1.9% earlier, while core measures hovered around 3%.
The Bank of Canada expects inflation to ease further due to lower mortgage costs, economic slack, and the removal of retaliatory tariffs.
However, economic turmoil is clearly seen around Canada’s financial landscape. For example, its GDP growth forecasts were sharply downgraded to 1.2% for 2025, 1.1% for 2026, and 1.6% for 2027. Unemployment rate also remains elevated at 7.1%.
The major factor behind this rate cut is the ongoing trade war between the U.S. and Canada. The BoC warned of “structural damage” from the U.S. protectionist policies, projecting that exports will fall sharply in the second half of 2025 and that Canada’s economy could be 1.5% smaller by the end of 2026 as a result.
Tensions have intensified recently, with U.S. President Donald Trump ending trade talks in response to an Ontario government ad campaign and threatening additional 10% tariffs.
Governor Macklem stated during the press conference that businesses and households are already feeling the consequences, adding that uncertainty is compounding economic challenges. He described the Bank’s forecasts as “humble” in light of rapidly evolving trade risks.
Bank of Canada stated in the official release, “Governing Council sees the current policy rate at about the right level to keep inflation close to two per cent while helping the economy through this period of structural adjustment.”
After Canada, the U.S. Federal Reserve is also expected to slash its benchmark federal rate by 25 basis points today, dropping it to 3.75%-4.0%. If it happens, this could be the second cut this year after September’s easing.
Bitcoin, Ethereum, and BNB Plunge Ahead of Jerome Powell’s Speech
Ahead of the US Fed Meeting, the cryptocurrency market has witnessed a new downward trend.
At the time of writing, Bitcoin is trading at around $112,452.55 with a 2.58% drop in the last 24 hours. Its market capitalization currently revolves around $2.23 trillion. Surprisingly, this drop comes amid an impressive inflow of $202.4 million on October 28, according to Farside.
Ethereum has also dropped by 3.87% in a day, declining to $3,950 with a market capitalization of $476.98 billion. BNB has also dipped by 3.28%, dropping to $1,099.79.
