The Bank of Canada is set to make its first interest rate announcement of the year this morning. Bank of Canada Governor Tiff Macklem arrives for the annual meeting of federal, provincial, and territorial finance ministers in Toronto, Friday, Dec. 15, 2023. THE CANADIAN PRESS/Nathan Denette
OTTAWA – The Bank of Canada held its key interest rate at five per cent today and signalled it has begun discussing when it should start cutting rates.
According to prepared remarks, governor Tiff Macklem says discussions at the central bank are shifting from whether its key policy rate is high enough to how long it needs to maintain it at five per cent.
Economists were widely expecting the central bank to maintain its benchmark rate but were waiting to see if the Bank of Canada would indicate a pivot toward rate cut considerations.
Despite the shift in messaging today, Macklem maintained that the central bank is not ruling out more rate hikes if inflation doesn’t co-operate.
Canada’s inflation rate has steadily declined over the last year and a half but ticked up again in December to 3.4 per cent.
The Bank of Canada’s new forecasts suggest inflation is still expected to return to two per cent in 2025.
This report by The Canadian Press was first published Jan. 24, 2023.
