The Globe and Mail reports in its Thursday edition that the Bank of Canada cut its policy rate by 25 basis points on Wednesday, following two previous cuts of 50 basis points each. The Globe's guest columnists Jeremy Kronick and Steve Ambler write that the BOC made a sound decision to provide some insurance for the Canadian economy. It is important to examine the numbers. The bank's target is 2 per cent headline inflation, with recent readings at 1.8 per cent in December, 1.9 per cent in November and 2 per cent in October. The slight drop was due to the GST holiday, but adjusting for indirect taxes shows inflation above 2 per cent. Current data indicate the economy is operating comfortably near the target. While the bank's two preferred measures have remained stubbornly high, with Consumer Price Index trim at 2.5 per cent and CPI median at 2.4 per cent, they have both fallen over the past couple of months. There are two major risks to Canada's economic outlook: the threat of significant tariffs imposed by the Trump administration, and the lack of a functioning Parliament, which has been prorogued until the end of March. The Economic Policy Uncertainty Index shows a level of uncertainty for Canada that is unprecedented.