The Bank of Canada lowers key interest rate to 4.25%

(September 04, 2024 )

Wednesday, September 4th, 2024

The Bank of Canada lowers key interest to 4.25%

The Bank of Canada lowered the interest rate again by 25 basis points to 4.25% today, its third consecutive rate cut this year, which is expected to be an immediate relief to debt carrying Canadians with variable rates of interest, which includes some home equity lines of credit and mortgages.

"If inflation continues to ease broadly in line with our July forecast, it is reasonable to expect further cuts in our policy interest rate," said Bank of Canada governor Tiff Macklem, "With inflation getting closer to the target, we need to increasingly guard against the risk that the economy is too week and inflation falls too much"

Inflation cooled to 2.5% in July and economists predict two more 25-basis-point interest rate cuts for the Bank of Canada's remaining decisions in 2024, en route to a 2.5% policy rate in 2025.

The Bank of Canada's next interest rate decision comes on October 23, 2024.

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