The Bank of Canada isn't sure when it will be able to start cutting interest rates, its summary of deliberations of its Jan. 24 rate decision reveals. Bank of Canada Governor Tiff Macklem delivers a luncheon speech Tuesday, February 6, 2024 in Montreal. THE CANADIAN PRESS/Christinne Muschi
OTTAWA – The Bank of Canada isn’t sure when it will be able to start cutting interest rates as it continues to contend with inflation that’s still too high and broad-based, its summary of deliberations of its Jan. 24 rate decision reveals.
Although the central bank is shifting away from considering more rate hikes, the summary says its governing council agreed it was difficult to foresee when it would be appropriate to start loosening monetary policy.
The central bank heldits key rate at five per cent last month, giving higher interest rates more time to slow the economy and ease price pressures.
Although the Bank of Canada has acknowledged its rate-hiking cycle is likely over, it hasn’t ruled out raising rates further if needed.
Inflation has fallen considerably over the last year and a half – reaching 3.4 per cent in December – but the summary notes prices for many goods and services are still rising at an abnormally fast pace.
Financial markets are anticipating the Bank of Canada will begin cutting interest rates as early as April.
This report by The Canadian Press was first published Feb. 7, 2024.
