Bank of Canada makes sixth consecutive cut, lowering key lending rate to 3.0%

On January 29th, its first scheduled announcement of 2025, the Bank of Canada announced that it had lowered the target for the overnight lending rate by 25 basis points to 3.0%. This marks the sixth consecutive cut to rates since June 2024.

In December, Canada’s Consumer Price Index (CPI) rose 1.8% on a year-over-year basis, down from a 1.9% increase in November, once again hitting under the Bank’s 2% inflation target. In its announcement, the central bank stated that lower interest rates are helping to increase household spending, and as a result, the economy is expected to strengthen gradually and inflation to stay close to target. However, trade conflict from south of the border threatens to cause economic turmoil.

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