1349 ET - Desjardins Group economist Royce Mendes says Bank of Canada Governor Tiff Macklem's speech confirms the BOC would cut rates should President Trump impose 25% tariffs on Canadian nonenergy imports, and 10% levy on Canadian energy products. Mendes cites one sentence in the speech, in which Macklem says that cuts could help smooth the adjustment to tariffs "provided the inflationary impact of tariffs is not too big." Mendes says this is in line with Desjardins' view that BOC would cut its policy rate by a half- to full-percentage point more than otherwise should hefty US tariffs materialize. In a Q&A session with a suburban Toronto audience after his speech, Macklem cautions BOC can't allow a "tariff problem to become an inflation problem." (paul.vieira@wsj.com; @paulvieira)

(END) Dow Jones Newswires

February 21, 2025 13:49 ET (18:49 GMT)

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