Bank Of Canada Cuts Key Interest Rate Again, More Cuts ‘Reasonable’ If Inflation Keeps Easing

Central bank cut rate for 2nd consecutive time, to 4.5 per cent

CBC ~ July 24th, 2024

The Bank of Canada cut its key interest rate to 4.5 per cent on Wednesday, with governor Tiff Macklem saying during a news conference that it would be reasonable to expect further rate cuts if inflation continues to ease.

The cut was widely expected by economists after inflation eased in June. It marked the central bank’s second consecutive cut after last month’s meeting, when it cut rates for the first time since March 2020.

“If inflation continues to ease broadly in line with our forecast, it is reasonable to expect further cuts in our policy interest rate,” Macklem told reporters.

The bank brought key interest rates down by 25 basis points to 4.75 per cent during that June meeting. The rate had previously been held at five per cent since July 2023.

The bank began a long and aggressive cycle of rate hikes in April 2022 to tame persistently high inflation.

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