The Bank of Canada, as predicted, delivered an expected rate cut – reducing its policy rates by 50 basis points.
According to the Bank’s latest press release, Bank of Canada “reduced its target for the overnight rate to 3¼%, with the Bank Rate at 3½% and the deposit rate at 3¼%. The Bank is continuing its policy of balance sheet normalization.”
In Wednesday’s press conference, Bank of Canada’s Governor Tiff Macklem stated; “Today, we lowered the policy interest rates by 50 basis points. This is our fifth consecutive decrease since June and brings our policy rate to 3¼%. Monetary policy has worked to bring inflation back to the 2% target. Our policy focus now is to keep inflation close to target.”
He noted, that the United States economy continues to perform strongly, with the US dollar appreciating against most other currencies, including the Canadian dollar. “Canada’s economy grew by 1% in the third quarter, which was slower than we expected. Recent data also suggest growth will be lower than projected in the final quarter of this year.”
“To summarize, inflation is back to the 2% target and lower interest rates are beginning to pass through to stronger spending by households…With inflation back to target, we have cut the policy rate by 50 basis points at each of the last two decisions because monetary policy no longer needs to be clearly in restrictive territory. We want to see growth pick up to absorb the unused capacity in the economy and keep inflation close to 2%.”
The Bank’s Governing Council have confirmed; “Going forward, we will be evaluating the need for further reductions in the policy rate one decision at a time.”
By CEO NA Editorial Staff











