The Globe and Mail reports in its Thursday edition that the Bank of Canada cut its benchmark interest rate to 2.75 per cent on Wednesday, marking its seventh consecutive cut. The Globe's guest columnists Jeremy Kronick and Steve Ambler write that despite a strong economy at the start of the year, uncertainty from the U.S. trade war and fluctuating tariff policies influenced this decision. An economic policy uncertainty index is nearly twice as high as during the COVID-19 pandemic and more than three times the level seen in the 2008 financial crisis, making data interpretation and forecasting difficult. Given these conditions, the decision to cut the rate seems justified. Despite the trade situation, the BOC could have kept the overnight rate unchanged. Core inflation measures rose in January and exceeded the 2-per-cent target, while average hourly earnings are climbing faster than productivity. As well, real GDP in the fourth quarter surpassed expectations. U.S. tariffs will increase prices in Canada, as a weaker loonie makes imports costlier. If Canada retaliates with its own tariffs on U.S. goods, prices will rise further. The BOC must assess whether these price changes are temporary or indicative of rising inflation.