Bank of Canada Lifts Rates to 22-Year High, Ending Four-Month Pause
Source: The Wall Street Journal.
WORLD * CANADA
Bank of Canada Lifts Rates to 22-Year High, Ending Four-Month Pause
Decision to raise policy rate to 4.75% was fueled by stronger-than-expected consumer spending and concerns over elevated inflation
By Paul Vieira
Updated June 7, 2023 11:09 am ET
OTTAWA—The Bank of Canada ended on Wednesday a short-lived pause in interest-rate increases and lifted rates by a quarter-point on stronger-than-expected consumer spending and mounting worries that inflation could get stuck at elevated levels.
The Bank of Canada raised its target for the overnight rate to 4.75% from 4.50%, marking a 22-year high. In January, the Bank of Canada was the first major developed-world central bank to declare a timeout on rate increases—after an aggressive campaign that raised borrowing costs by 4.25 percentage points over a 10-month period—to assess the impact of sharply higher rates on the economy. The belief among central bank officials was that economic activity and inflation would decelerate through 2023.
The economic data have said otherwise, forcing Canada’s central bank and its global peers to rethink how high interest rates need to go to cool inflation. Some economists believe the Bank of Canada isn’t finished with rate increases and anticipate another quarter-point lift when senior officials deliberate in July.
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Read more: https://www.wsj.com/articles/bank-of-canada-ends-four-month-pause-lifts-rates-to-22-year-high-f3d20307
The Bank of Canada ended on Wednesday a short-lived pause on interest-rate increases and lifted rates by a quarter-point on stronger-than-expected consumer spending
wsj.com
Bank of Canada Lifts Rates to 22-Year High, Ending Four-Month Pause
The decision to raise the policy rate to 4.75% was fueled by stronger-than-expected consumer spending and concerns over elevated
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