The Fed has cut rates 100 basis points closer to neutral over the past year. Powell notes stable unemployment lets them move cautiously, while another central bank that cut more aggressively saw inflation hit its 2% target despite a weaker economy. U.S. tariffs could shift the outlook.
Our policy rate is now 100 basis points closer to neutral than it was a year ago. And the stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance.
We, you know, we've obviously reduced interest rates quite a bit more than the Fed. Our economy was, was weaker through last year as we reduced rates. We were seeing, actually economic activity pick up with inflation around 2%. Of course, the situation has changed with, with new U.S. tariffs. But, yes, we, you know, we'll watch closely what, what, what the Fed does, and that's something that we will take into account in terms of our own political, our own monetary policy. But I think the best thing the Fed can do for us is to do a good job managing monetary policy in the United States.
