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The Bank of Canada has lowered its key interest rate to 4.75 per cent.
‘We’ve come a long way in the fight against inflation,’ said BOC governor Tiff Macklem
Bank of Canada governor Tiff Macklem and senior deputy governor Carolyn Rogers make an announcement about the bank’s key interest rate.
The Bank of Canada has lowered its key interest rate to 4.75 per cent, marking the bank’s first rate cut since March 2020.
Economists were largely expecting the move. The inflation rate has moved closer to the bank’s two per cent goal in recent months, with the bank’s preferred core measures of inflation also easing throughout the spring.
Last week’s GDP numbers were weaker than expected, increasing the likelihood of a cut.
Bank governor Tiff Macklem said in published remarks that the bank’s monetary policy no longer needs to be as restrictive.
“We’ve come a long way in the fight against inflation. And our confidence that inflation will continue to move closer to the two per cent target has increased over recent months,” Macklem said.
CIBC economist Andrew Grantham wrote in a note to clients that “with core inflation decelerating and growth remaining tepid there wasn’t a good excuse to not begin the process of moving rates lower today.”
Macklem and senior deputy governor Carolyn Rogers are holding a press conference explaining the decision at 10:30 a.m. ET. A livestream can be found above.
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