BREAKING: The Bank of Canada has hiked its policy rate by another 25 basis points.
by another 25 basis points, bringing it to levels not seen since 2001 amid fears the decline in inflation “could stall.”Many economists, including Canada’s big six banks, had expected the move amid signs of resilience in the Canadian economy and fears that annualOverall inflation has cooled to 3.4 per cent in May from a recent peak of 8.
The central bank said in a statement accompanying the rate hike that it now expects inflation will hover around three per cent for the next year before “gradually declining to in the middle of 2025.” This is later than previous expectations that inflation would hit two per cent by the end of 2024. The Bank of Canada’s governing council “remains concerned that progress towards the target could stall, jeopardizing the return to price stability,” according to the statement.
CIBC senior economist Andrew Grantham said in a note to clients Wednesday morning that the tone of the Bank’s statement implies the risks are “skewed towards another hike after the summer.”
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