Bank of Canada cuts key interest rate by half point for first time since COVID-19 pandemic

Jenna Benchetrit · CBC News · Posted: Oct 23, 2024 6:50 AM 

The Bank of Canada has lowered its key interest rate to 3.75 per cent, making a 50 basis-point cut for the first time since the COVID-19 pandemic.

Before Wednesday, the rate stood at 4.25 per cent. Economists were expecting the central bank to go with a larger-than-usual cut, compared to the 25-basis-point downgrades made in June, July and September.

The last time the bank made a cut this size was on March 27, 2020.

As concerns over inflation have subsided — out-of-control price growth, the catalyst for the central bank's initial rate-hike campaign, is now back within the target range — the bank has focused on cutting to keep inflation stable and support economic growth, which has been sluggish under the pressure of high rates.

"We need to stick the landing," Bank of Canada governor Tiff Macklem told a news conference Wednesday morning.

"With inflation back to two per cent, we want to see growth strengthen. Today's interest rate decision should contribute to a pickup in demand."

Continue reading here...