Bank of Canada Announces Third Consecutive Policy Rate Cut
The Bank of Canada reduced its target once again for the overnight lending rate from 4.5% to 4.25%.
The move was announced on Wednesday, September
4, and was widely expected by financial markets, making it the Bank’s third rate
reduction since the onset of the pandemic.
Canada’s economy picked up in the second
quarter of 2024, according to the Bank of Canada, although early indicators
show a softening in economic activity. The Bank also stated the labour market continues
to slow.
The Bank of Canada continues to focus on elevated
housing costs as a significant contributor to inflation; however, it also mentioned
both headline and core measures of inflation have moderated and are close to
historical norms.
Although excess supply in the economy is helping
to lower inflation, the Bank is also monitoring housing and services costs that
are pulling inflation in the opposite direction. The Bank
stated future monetary policy decisions “will be guided by incoming
information” and its assessment of whether further rate cuts are necessary
to keep inflation in check.
The
Bank of Canada will make its next scheduled interest rate announcement on Wednesday,
October 23, and will publish its full outlook for the economy and inflation in
its next Monetary Policy Report at that time.
Bank of Canada Announces Third Consecutive Policy Rate Cut
The Bank of Canada reduced its target once again for the overnight lending rate from 4.5% to 4.25%.
The move was announced on Wednesday, September
4, and was widely expected by financial markets, making it the Bank’s third rate
reduction since the onset of the pandemic.
Canada’s economy picked up in the second
quarter of 2024, according to the Bank of Canada, although early indicators
show a softening in economic activity. The Bank also stated the labour market continues
to slow.
The Bank of Canada continues to focus on elevated
housing costs as a significant contributor to inflation; however, it also mentioned
both headline and core measures of inflation have moderated and are close to
historical norms.
Although excess supply in the economy is helping
to lower inflation, the Bank is also monitoring housing and services costs that
are pulling inflation in the opposite direction. The Bank
stated future monetary policy decisions “will be guided by incoming
information” and its assessment of whether further rate cuts are necessary
to keep inflation in check.
The
Bank of Canada will make its next scheduled interest rate announcement on Wednesday,
October 23, and will publish its full outlook for the economy and inflation in
its next Monetary Policy Report at that time.
