Bank of Canada interest rate

The increase marks the third so far this year by Canada's central bank and the second consecutive half-percentage-point increase, taking the benchmark rate ...

Despite the string of rate hikes since March, the Bank of Canada’s policy rate remains low by historic standards and continues to stimulate the economy. Central bank officials have said they intend to get the benchmark rate to a “neutral” level relatively quickly. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Ahead of Wednesday’s announcement, markets were pricing in another half-point move in July, then smaller quarter-point moves at each of the bank’s remaining meetings this year. Phil Soper, president and chief executive of the real estate company Royal LePage, said that Canada’s housing market started cooling off last fall, as it became clear that home prices were way overstretched. It is now moving aggressively to make up for the fact that it didn’t hike interest rates earlier and to shore up its credibility as an inflation fighter. But higher rates will dampen demand in the Canadian economy. Inflationary pressures are broadening out to a wider range of goods and services, making it harder for Canadians to avoid. Mr. Macklem had previously said that he would not rule anything out, but that a 75-basis-point rate hike would be “very unusual.” This is the first time that the bank has announced back-to-back 50-basis-point rate increases since beginning fixed-date interest-rate announcements in 2000. The central bank’s governing council voted to raise the policy rate by half a percentage point – its third interest-rate increase this year. Higher interest rates are already reverberating through the economy, most notably in the rate-sensitive housing market.

Inflation globally and in Canada continues to rise, largely driven by higher prices for energy and food. In Canada, CPI inflation reached 6.8% for the month of ...

With the economy in excess demand, and inflation persisting well above target and expected to move higher in the near term, the Governing Council continues to judge that interest rates will need to rise further. The pace of further increases in the policy rate will be guided by the Bank’s ongoing assessment of the economy and inflation, and the Governing Council is prepared to act more forcefully if needed to meet its commitment to achieve the 2% inflation target. The increase in global inflation is occurring as the global economy slows. The Bank will use its monetary policy tools to return inflation to target and keep inflation expectations well anchored. This is dampening the outlook, particularly in Europe. In the United States, private domestic demand remains robust, despite the economy contracting in the first quarter of 2022. Inflation globally and in Canada continues to rise, largely driven by higher prices for energy and food.

In a vacuum, central banks slash interest rates to encourage borrowing and investing to stimulate a sluggish economy, and they raise rates when they want to ...

Those owners are finding themselves having to stretch their mortgages over a longer time period to bring the monthly payment down to something they can afford. Brookes gives the example of owners who bought years ago when mortgage rates of one or two per cent were easy to find. The national average house price has fallen for two months in a row and is expected to fall further. But those record-low borrowing rates have contributed to rising inflation, which is what's prompting the central bank to change direction. "It's going to be at least six years before we recover fully," he said. While he's pleased his business is now turning a profit again, this week's rate hike will stretch his budget even further.

Economists are expecting the Bank of Canada to hike its key interest rate by another half-percentage point to 1.5 per cent on Wednesday.

Economists are expecting the Bank of Canada to hike its key interest rate by another half-percentage point to 1.5 per cent on Wednesday. The Bank of Canada will make its latest interest rate decision Wednesday morning as it tries to put the brakes on runaway inflation. The soaring cost of consumer goods from gasoline to groceries has experts speculating that further interest rate hikes are on the horizon this year.

OTTAWA — The Bank of Canada will make its latest interest rate decision this morning as it tries to put the brakes on runaway inflation.

The bank makes changes to its trendsetting interest rate in an effort to control inflation with a target of two per cent. "Frankly they need a little bit of luck," he said of the bank's governing council. The impact of rising interest rates is already visible in the housing market, which is just starting to cool after nearly two white-hot years. "I don't get the sense that the dam has completely broken. It further noted that the "risk of elevated inflation becoming entrenched has risen." Russia’s invasion of Ukraine, COVID-19 lockdowns in China and backlogged supply chains are fuelling “uncertainty” and higher prices for energy and food, the institution said.

The 50-point move was expected by economists who predicted the Bank of Canada would raise rates for the third time this year in an effort to tamp down on ...

The Bank of Canada’s previous interest rate hikes have had a cooling effect on Canada’s red-hot housing market. “What is easy to forget is that we’ve had two years of artificially low rates. “Only 35 per cent of businesses have no COVID debt, and the average debt for small businesses in Canada is $160,000. “We’ve seen some products go up by two or 300 per cent from last year in terms of cost. “If I knew that this would have been a potential situation that I was getting myself into, I would have gone with a fixed rate last year. I was putting my trust in the mortgage agent, and obviously, he didn’t know what was going to happen, but I definitely regret choosing the variable rate.

BoC deputy governor Paul Beaudry says price pressures are broadening and inflation is likely to go higher before easing.

There was always a risk that inflation would prove more persistent than the bank anticipated, and that it would become entrenched, Mr. Beaudry said. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. That decision has been criticized by private sector economists who say the bank was slow to begin tightening monetary policy, particularly once it became apparent in the fall of 2021 that high inflation would not be transitory. At that point, the housing market and consumer spending began to weaken so dramatically that rate cuts were on the table even before the pandemic.” In a speech on Thursday, deputy governor Paul Beaudry said there is a growing probability that the bank will need to move to the top end of this range or above. “The Canadian economy is extremely interest rate sensitive, which could limit the number of additional hikes needed to cool demand. “Second, for most of 2021, the economy was operating well below capacity, so there wasn’t excess demand. If left unchecked, it can open the door to persistently higher inflation,” Mr. Beaudry said in his speech. Analysts took this to mean that the bank was open to a possible 75 basis point rate hike – which would be the biggest rate increase since the 1990s. “Inflationary shocks coming from abroad are often temporary,” Mr. Beaudry said. Preventing high inflation from becoming entrenched is much more desirable than trying to quash it once it has,” he said. All this will depend exactly on the data that comes in.

OTTAWA - The deputy governor of the Bank of Canada says it may need to raise its key interest rate to three per cent or beyond to ensure inflation doe...

In April, the bank increased the rate by half a percentage point to one per cent. He said some Canadians feel inflation is already feeding on itself, driven by expectations of even costlier goods as wages rise to meet mounting prices in a self-reinforcing cycle. The groundwork for more oversized hikes follows the Bank of Canada’s big increase to its benchmark rate Wednesday for the second time in two months — a raise of half a percentage point to 1.5 per cent.