The Bank of Canada held its benchmark interest rate steady at 5.0 per cent on Wednesday and hinted that its tightening cycle might have peaked.
The decision, which marks the fourth consecutive hold from the central bank, was widely expected by economists.
According to prepared remarks from Bank of Canada governor Tiff Macklem, conversations at the central bank have shifted from debating whether interest rates are high enough to how long the central bank needs to keep rates at current levels.
Heading into Wednesday’s decision, market watchers had started to forecast a timeline for rate cuts, with calls for easing to start between spring and summer of 2024.
Macklem cautioned, however, that rates could still rise further if inflation does not cooperate.
“Inflation is still too high, and underlying inflationary pressures persist,” he said. “We need to give these higher rates time to do their work.”
The Bank of Canada has been raising the cost of borrowing since March 2022 in an effort to tamp down inflation, which has declined sharply from highs of 8.1 per cent. Annual inflation ticked up to 3.4 per cent in December from 3.1 per cent the month previous. But economists have pointed to slowing elsewhere in the economy as likely to tame price pressures.
Revised forecasts in the Bank of Canada’s Monetary Policy Report (MPR) released Wednesday reaffirm the central bank’s expectations that inflation will hit its two per cent target in 2025.
But Macklem warned that future declines in inflation will be “gradual and uneven,” suggesting that the path back to the two per cent target will be “slow.”
The MPR also shows the Bank of Canada expects the Canadian economy narrowly avoided a recession in 2023. While Statistics Canada data shows real gross domestic product contracted in the third quarter last year, the central bank predicts economic growth was flat in the final quarter, skirting the definition of a technical recession – two consecutive quarters of declines.
Source: By Craig Lord, Global News
https://globalnews.ca/news/10246847/bank-of-canada-rate-decision-jan-2024/#:~:text=The%20Bank%20of%20Canada%20held,was%20widely%20expected%20by%20economists.
Posted January 24, 2024 7:45 am
Updated January 24, 2024 8:32 am
Bank of Canada holds key rate, signals hikes could be over
January 24, 2024
The Bank of Canada held its benchmark interest rate steady at 5.0 per cent on Wednesday and hinted that its tightening cycle might have peaked. The decision, which marks the fourth consecutive hold from the central bank, was widely expected by economists. According to prepared remarks from Bank of Canada governor Tiff Macklem, conversations at […]
Duis iaculis ex et ultrices pulvinar. Nullam vitae lectus magna. Proin consequat egestas mauris, id pellentesque dolor. Etiam justo sem, dignissim ac nibh quis, interdum iaculis tellus. In a dui vel justo consequat dictum. Maecenas fermentum blandit diam, ac consequat turpis euismod a. Aliquam nec finibus elit. Sed diam magna, bibendum non rutrum a, facilisis quis quam. Nulla vestibulum eleifend dolor, sed dapibus libero aliquet eu.
Praesent feugiat nisi sit amet egestas pellentesque. Morbi non pretium arcu, non efficitur urna. Vivamus ac nulla tristique, eleifend metus a, maximus sapien. Ut id interdum enim. Donec et ultrices massa. Aenean eros orci, ullamcorper et dapibus eget, tincidunt eget lorem. Nullam in venenatis urna, eu bibendum tortor. Phasellus at hendrerit ipsum, vitae placerat mauris. Nulla elit turpis, ullamcorper eleifend viverra blandit, lobortis ac orci. Class aptent taciti sociosqu ad litora torquent per conubia nostra, per inceptos himenaeos. Phasellus vitae neque eget lectus vehicula placerat.
“If you look at what you have in life, you’ll always have more. If you look at what you don’t have in life, you’ll never have enough.” –Oprah Winfrey
Duis iaculis ex et ultrices pulvinar. Nullam vitae lectus magna. Proin consequat egestas mauris, id pellentesque dolor. Etiam justo sem, dignissim ac nibh quis, interdum iaculis tellus. In a dui vel justo consequat dictum. Maecenas fermentum blandit diam, ac consequat turpis euismod a. Aliquam nec finibus elit. Sed diam magna, bibendum non rutrum a, facilisis quis quam. Nulla vestibulum eleifend dolor, sed dapibus libero aliquet eu.
Lorem ipsum dolor sit amet, consectetur adipiscing elit.
Categories
Subscribe
Gallery
