In a move that will surely impact Canada’s economy, the Bank of Canada has reduced its benchmark interest rate by 0.25% to 4.5% as Governor Tiff Macklem focuses on avoiding a national recession. The economic growth forecast for 2024 was lowered to 1.2%, with 2025’s outlook at 2.1%.
The BoC anticipates inflation reaching its 2% target toward the end of 2025. Macklem mentioned that further rate cuts are possible. “If inflation continues to ease broadly in line with our forecast, it is reasonable to expect further cuts in our policy interest rate,” he stated. “The timing will depend on how we see these opposing forces playing out.”
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