Bank of Canada cuts key interest rate to 3.25%

Posted on December 11, 2024 by Peggy

The Bank of Canada lowered its interest rate by 50-basis points to 3.25 per cent on Wednesday but signalled a slower pace of rate cuts moving forward.

Economists were largely expecting another weighty cut following a quarterly GDP report that saw growth come in below the central bank’s projection and a jobs report that showed an uptick in the unemployment rate.

The decision marked the fifth consecutive reduction since June. In October, the central bank cut rates by a half-point for the first time since the pandemic.

Governor Tiff Macklem said in his prepared statement that the central bank opted for two large rate cuts in a row because inflation and economic growth don’t need to be restricted anymore.

With inflation back at the two-per-cent target, the central bank is now focused on keeping it there.

However, with interest rates now down substantially, Macklem signalled the central bank will likely take a more gradual approach to monetary policy.

Macklem and senior deputy governor Carolyn Rogers are expected to speak and take questions from media at 10:30 a.m. ET. The conference will be livestreamed on this page.

Bank of Canada officials speak following interest rate announcement

Started 12 minutes ago

Bank of Canada governor Tiff Macklem and senior deputy governor Carolyn Rogers give a statement and answer questions about the central bank’s interest rate announcement.

More to come.