Bank Of Canada Lowers Interest Rates By A Quarter Point As Widely Expected

Citing continued evidence that underlying inflation is easing, the Bank of Canada on Wednesday announced it has decided to lower interest rates by 25 basis points. The Bank of Canada reduced its targ...

RTT Staff Writer•Wednesday, June 5, 2024•1 min read

Citing continued evidence that underlying inflation is easing, the Bank of Canada on Wednesday announced it has decided to lower interest rates by 25 basis points.

The Bank of Canada reduced its target for the overnight rate to 4.75 percent, with the bank rate at 5.0 percent and the deposit rate at 4.75 percent.

The widely expected decision comes as recent data has increased the Canadian central bank’s confidence that inflation will continue to move towards its 2 percent target.

The bank’s accompanying statement noted its preferred measures of core inflation has slowed, while three-month measures suggest continued downward momentum.

Nonetheless, the Bank of Canada noted risks to the inflation outlook remain and said its Governing Council is closely watching the evolution of core inflation.

The Governing Council remains particularly focused on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behavior, the bank said.

The Bank of Canada’s next scheduled date for announcing the overnight rate target is July 24, when the bank will also publish its next full outlook for the economy and inflation.

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