The Bank of Canada has just announced a 0.50% increase to their benchmark interest rate which now sits at 4.25%. Early predictions were for a 0.25% rate hike while many economists shifted predictions in the past couple days to the 0.50% hike we see this morning. This will push the prime lending rate from 5.95% to 6.45% at most lenders.
From CBC
Bank of Canada raises interest rate again — but the pace of hikes may be slowing
Canada’s central bank continued its campaign to wrestle high inflation into submission on Wednesday, raising its benchmark interest rate by 50 basis points to 3.75 per cent.
The Bank of Canada’s rate — officially known as the target for the overnight rate — is the amount that retail banks are charged for short-term loans.
But it filters down into the economy by influencing the rates that Canadians get from their own lenders on things like savings accounts and mortgages.
After slashing its lending rate to near zero early in the COVID-19 pandemic, the bank has raised its benchmark rate six times since March, as it scrambles to rein in inflation, which has run up to its highest level in decades.
Read more on CBC.ca (Pete Evans · CBC News)
From Financial Post
Bank of Canada raises interest rate to 4.25% in what may be the last hike
The Bank of Canada might be finished raising interest rates.
Governor Tiff Macklem raised the benchmark interest rate a half-point on Dec. 7, which surprised some Bay Street economists who thought the central bank would opt to taper a series of outsized increases to avoid causing undue damage to the economy.
But just as many analysts predicted the Bank of Canada would continue its assault on the biggest inflation scare since the 1980s, noting that mission is far from complete. A decision to return to a typical quarter-point change in policy would have sent a message that Canada’s central bankers were losing their nerve, risking a scenario where large swaths of the public would conclude inflation wouldn’t be coming down.
Read more on Financial Post (Kevin Carmichael – Dec 07, 2022 )
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