The Bank of Canada (BoC) announced on September 17, 2025, that it lowered its key interest rate by 25 basis points to 2.5%. This is the first rate cut since March 2025 and brings the policy rate to a three-year low. The decision was unanimous by the Governing Council and was motivated by a weakening economy and diminished inflation risks. The BoC cited issues such as a sluggish job market, increased unemployment, and trade uncertainties impacting economic activity. The central bank also indicated readiness to cut rates further if economic risks increase in coming months. The rate cut aligns with expectations as inflation shows signs of easing and economic growth slows.