Tiff Macklem, Governor of the Bank of Canada, holds a press conference at the Bank of Canada in Ottawa on Wednesday, Jan. 25, 2023. THE CANADIAN PRESS/Sean Kilpatrick
OTTAWA – The Bank of Canada raised its key interest rate by a quarter of a percentage point to 4.5 per cent on Wednesday and says it expects to keep rates on hold for now as it assesses the economic data. Here is some reaction to the announcement Wednesday:
Bank of Canada governor Tiff Macklem
“The decline in inflation since the summer is welcome relief for the many Canadians who are struggling to keep up with the rising cost of living. But at more than six per cent, inflation remains too high.”
“We’re still a long way from our target, but recent developments have reinforced our confidence that inflation is coming down. And we are committed to getting inflation all the way back to two per cent, so that Canadians can once again count on low, stable and predictable inflation and sustainable economic growth.”
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Benjamin Reitzes, managing director, Canadian rates and macro strategist, at Bank of Montreal
“While policymakers haven’t shut the door on more hikes, the bar for further tightening is quite high. It looks like a March move is off the table barring some wild data. The April policy decision will be more definitive as we’ll have a few employment and CPI reports by then.”
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Joe Brusuelas, chief economist at accounting and consultancy firm RSM
“It is now appropriate that the Bank of Canada strongly consider a strategic pause in its efforts to restore price stability.”
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Unifor national president Lana Payne
“Workers jobs and incomes are at stake here. It’s time to stop the rate hikes before the economy is pushed into a deep recession.”
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TD Bank senior economist James Orlando
“With the belief that the economy is on the path to price stability, the BoC can now step to the sidelines and let its restrictive policy filter through the economy.”
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James Laird, co-CEO of Ratehub.ca and president of CanWise mortgage lender
“Today’s announcement should mean the floor for home values across the country is near. Home values might drift higher as long as the key overnight rate has peaked.”
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Stephen Brown, senior Canada economist at Capital Economics
“While the bank did not rule out future rate hikes entirely, the new guidance reinforces our view that the bank’s next move is likely to be a rate cut, albeit not until later this year.”
This report by The Canadian Press was first published Jan. 25, 2023.
