Sunday, October 26, 2025

Rate Cuts Are Here: Bank of Canada Cuts Rates 25 Bps

The Bank of Canada delivered a quarter-point interest rate cut on Wednesday, lowering its benchmark overnight rate to 4.75% as it seeks to navigate a path to tame stubbornly high inflation without derailing the economy.

The reduction marks a shift for the central bank after an aggressive tightening cycle that saw it raise rates at a record pace of 4.25 percentage points over to rein in price pressures. The move signals growing confidence that the worst of inflation has passed and that the economy is slowing enough to bring it back toward the 2% target.

“With continued evidence that underlying inflation is easing, Governing Council agreed that monetary policy no longer needs to be as restrictive,” officials led by Governor Tiff Macklem said in the statement announcing the decision.

Inflation Moderating

Data showed Canada’s annual inflation rate cooled to 2.7% in April, down from 4.3% in January. The Bank’s preferred measures of core inflation have also slowed, with three-month rates pointing to continued downward momentum.

While price pressures remain elevated in areas like shelter costs, the statement from the Bank of Canada suggests the central bank is becoming more confident the disinflationary trend will persist as higher borrowing costs work their way through the economy.

Growth Slowing

At the same time, economic growth has slowed sharply from last year’s torrid pace. First-quarter gross domestic product expanded just 1.7% annualized, weaker than the Bank had projected in April, as inventory investment weighed on activity.

The labor market also appears to be loosening, with employment growing at a slower clip than the working-age population. That suggests demand in the economy is beginning to come more in line with supply constraints.

With the first rate cut under its belt, investors will be watching closely for signals on whether the Bank plans to take a pause or deliver further easing in the months ahead as it aims to orchestrate a soft landing for the economy.


Information for this story was found via the Bank of Canada, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. 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

The Best News for Gold Was the Drop! – Peter Grandich

McEwen Copper: The Los Azules Feasibility Study

This Is Why the Gold Run Is Not Done! | Peter Marrone – Allied Gold

Recommended

Steadright Enters MOU To Acquire Historic Goundafa Polymetallic Mine In Morocco

Military Seizes Power in Madagascar After President Flees

Related News

Bank of Canada Pauses Rate Hikes

As was forecasted by economists, Bank of Canada Governor Tiff Macklem decided to keep the...

Wednesday, September 6, 2023, 10:01:21 AM

Bank of Canada Prepares to Aggressively Tackle Inflation

The show must go on! Despite growing uncertainty surrounding geopolitical tensions in eastern Europe and...

Saturday, March 26, 2022, 01:05:00 PM

OECD Anticipates Bank Of Canada Raising Rates As High As 4.5% By 2024

The Organisation for Economic Co-operation and Development (OECD) provided their economic outlook in September, with...

Sunday, October 2, 2022, 05:13:00 PM

Bank of Canada Will Maintain 0.25% Target Rate, Continue With Bond Purchases

As Canada’s economy continues to experience prolonged slack amid a resurgence of Covid-19 cases and...

Wednesday, December 9, 2020, 02:13:00 PM

Are Rate Cuts Coming? Economists Say Relief May Come Sooner Than Expected

Canadians may soon see the light at the end of the tunnel. Economists forecast that...

Thursday, November 16, 2023, 12:56:00 PM