The Bank of Canada lowered its interest rate by 50-basis points to 3.25 per cent on Wednesday but signalled a slower pace of rate cuts moving forward.
Economists were largely expecting another weighty cut following a quarterly GDP report that saw growth come in below the central bank’s projection and a jobs report that showed an uptick in the unemployment rate.
The decision marked the fifth consecutive reduction since June. In October, the central bank cut rates by a half-point for the first time since the pandemic.
Governor Tiff Macklem said in his prepared statement that the central bank opted for two large rate cuts in a row because inflation and economic growth don’t need to be restricted anymore.
With inflation back at the two-per-cent target, the central bank is now focused on keeping it there.
However, with interest rates now down substantially, Macklem signalled the central bank will likely take a more gradual approach to monetary policy.
Macklem and senior deputy governor Carolyn Rogers are expected to speak and take questions from media at 10:30 a.m. ET. The conference will be livestreamed on this page.
Bank of Canada governor Tiff Macklem and senior deputy governor Carolyn Rogers give a statement and answer questions about the central bank’s interest rate announcement.
More to come.
