Group 1 - The Bank of Canada lowered the benchmark overnight rate by 25 basis points to 2.5%, marking the first rate cut since March this year, in response to the economic impact of U.S. tariffs [1] - The Canadian economy contracted by an annualized 1.6% in Q2, primarily due to significant declines in exports and business investment, with the central bank highlighting that U.S. tariffs and trade uncertainty are severely suppressing economic activity [1] - The labor market has deteriorated, with over 106,000 jobs lost in July and August, and the unemployment rate rising to 7.1%, particularly affecting the manufacturing, retail, and wholesale sectors [1] Group 2 - Tariffs imposed by the U.S. government on Canadian goods, including a 35% tariff on non-compliant products, have become a core factor in the current economic weakness [2] - The central bank's decision to cut rates was unanimous, but there was discussion about maintaining rates, reflecting caution due to ongoing global trade tensions [2] - The Canadian dollar fell against the U.S. dollar following the rate decision, while Canadian two-year bond yields rose slightly [2] Group 3 - The interest rate swap market indicates that investors fully price in at least one more rate cut in this cycle, with a 50% probability of another cut in October [3] - Some economists believe that the current rate cut does not signal the start of a deep easing cycle, expecting the central bank to maintain a 2.25% policy rate until 2026, supported by potential fiscal stimulus [3] - The central bank is expected to adjust its policy dynamically based on short-term economic data, with predictions of two more rate cuts in the coming months [3] Group 4 - Core inflation indicators are declining, with the central bank's preferred measures showing annual rates around 3%, while broader inflation pressures are close to 2.5% [4] - The central bank is closely monitoring how tariff disruptions and supply chain restructuring affect consumer prices and inflation expectations [4] - Recent stability in U.S. tariff policies is noted, but the upcoming renegotiation of the North American trade agreement introduces new uncertainties [4]