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Canada Economy · Inflation · Interest Rates · Monetary Policy
The Bank of Canada maintained its benchmark interest rate at 4.5 percent, a widely anticipated move following eight consecutive hikes since March 2022.
The central bank believes its previous actions are effectively slowing the economy and bringing down inflation. Official forecasts now project inflation to reach 3 percent by mid-2023 and return to the 2 percent target by the end of next year.
Governor Tiff Macklem affirmed the bank's commitment to price stability, while Deputy Governor Carolyn Rogers noted the rate hikes are reducing consumption and demand. While the pause offers relief to some, particularly mortgage holders facing significant payment increases upon renewal, economists like Brett House caution against premature expectations of rate cuts, citing persistent economic pressures and inflation still above target.
The bank remains open to further hikes if necessary, emphasizing that the job of restoring price stability is not yet complete.
