Saturday, September 13, 2025

Latest

Bank of Canada Delivers 25 Basis-Point Hike, Hints at Pausing to Assess Economic Impact

For the eighth consecutive meeting, the Bank of Canada opted to raise its overnight rate in face of persistently high inflation— this time, by 25 basis points— in line with expectations.

The central bank’s effective rate now sits at 4.5%, marking one of the sharpest and most aggressive tightening cycles in the bank’s history. With inflation sitting at 6.6% last month and the labour market at full employment by technical definition, some economists believe the Governor Tiff Macklem is surely going to tip Canada’s economy into a recession— if he hasn’t done so already.

“I’m still convinced we’re likely facing a recession this year and it will be all the deeper if the Bank of Canada continues this single-minded crusade,” warned Center for Future Work chief economist Jim Stanford earlier this week. Indeed, the Bank of Canada is expecting inflation will subside substantially this year to around 3% thanks to lower energy prices, easing of global supply chain bottlenecks, and the effects of higher interest rates. The bank forecasts to reach its 2% target range on inflation sometime in 2024.

Policy makers estimate Canada’s economy expanded 3.6% in 2022, marking a modest improvement from October’s projections. However, in line with economists’ and consumers’ expectations, output is expected to flatline starting in the second half of 2023, before potentially picking up momentum by the end of the year. GDP growth is now forecast to sit at around 1% this year, and 2% in 2024. Going forward, the Bank of Canada said it will likely keep interest rates at 4.5% until the monetary impacts fully ripple through the economy.

“Governing Council expects to hold the policy rate at its current level while it assesses the impact of the cumulative interest rate increases,” read the bank’s policy statement. “Governing Council is prepared to increase the policy rate further if needed to return inflation to the 2% target, and remains resolute in its commitment to restoring price stability for Canadians.”

Information for this briefing was found via the Bank of Canada and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Avino Q2 Earnings: Steady As She Goes

MEG Energy: Cenovus Comes In With $7.9 BILLION Offer

Orla Mining Q2 Earnings: Musselwhite Changes Everything

Recommended

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Goliath Resources Hits 18.58 g/t Gold Over 5.00 Metres At Surebet

Related News

Canada’s CPI Holds Steady At 3.1% In November

Canada’s Consumer Price Index (CPI) remained consistent in its year-over-year growth, registering a 3.1% increase...

Tuesday, December 19, 2023, 09:00:06 AM

Bank of England Admits It Is Helpless in Taming Inflation, Warns of ‘Apocalyptic’ Global Food Shortages

The Bank of England has finally thrown in the towel, admitting defeat in curbing out-of-control...

Wednesday, May 18, 2022, 02:18:00 PM

Bank of Canada Again Cuts Rates By 25 Basis Points

The Bank of Canada has cut its key interest rate by 25 basis points to...

Wednesday, September 4, 2024, 11:13:05 AM

US Private Payrolls Disappoint Despite ADP’s Revised Methodology

In further testament that the labour market is rapidly losing momentum despite assurances from the...

Wednesday, August 31, 2022, 01:02:29 PM

Bank of Canada Open to 75 Basis Point Rate Hike in Face of Surging Inflation

The Bank of Canada signaled it is prepared to unleash a bout of even more...

Friday, April 22, 2022, 03:08:00 PM