October 24, 2024
The Bank of Canada has reduced its key benchmark rate by 50 basis points to 3.75%, marking its first major move in over four years. This cut is the fourth consecutive reduction since June 2024, signaling that inflation has returned to a more manageable level of 1.6%—below the 2% target. Governor Tiff Macklem highlighted that despite previous cuts, economic demand remained sluggish, so this larger reduction aims to spur growth and strengthen the economy.
Key highlights:
- Inflation dropped to 1.6% in September, below the 2% target.
- The BoC plans to maintain low inflation, with further rate cuts possible depending on economic data.
- GDP growth projections for Q3 have been revised down to 1.5%.
- Markets anticipate an additional rate cut in December, with a 25% chance of another 50-basis-point reduction.
- The Canadian dollar and bond yields dropped slightly following the announcement.
Macklem emphasized the need to support demand and stimulate economic activity while keeping inflation stable.
To read the full article please click here: Bank of Canada cuts rates, hails ‘good news’ on low inflation | The Western Producer
