Canada Taux d'intérêt

The Bank of Canada cut its key interest rate by 25bps to 4.25% in its September 2024 meeting, as expected, to mark the third consecutive 25bps slash after having left the hiking cycle’s terminal rate of 5% for 10 months. The central bank noted that the extension of its cutting cycle was warranted as excess supply in the Canadian economy continued to put downward pressure on inflation. Additionally, policymakers reiterated some concerns about undershooting inflation targets, adding to their worries of overtightening. Also aligning with the need for looser financial conditions, the Governing Council noted that the labor market continued to slow in recent months, although wage growth remains elevated when compared to productivity. Still, the central bank noted that inflation remains elevated for shelter and selected services, noting that upside risks to price growth are also present.