Bank of Canada Rate Announcement
Oct 25, 2023·By Snezhana Todorova
The Bank of Canada decided to keep the overnight rate unchanged today!
So, in today's update, Governor Tiff Macklem talked about how September threw a curveball with lower-than-expected inflation and the economy not flexing its muscles. That's why they're sticking with the 5% overnight rate for now.
The latest economic info tells us that the recent rate hikes over the last 18 months are starting to kick in.
People are finally cutting back because higher rates are messing with their budgets. And businesses are thinking twice about hiring and investing as demand takes a breather.
Basically, while the rest of us are sweating about the economy slowing down, the Bank of Canada is doing a happy dance because their rate hikes seem to be doing the trick.
And there is always a BUT - and the Bank wants us to know they're not letting their guard down on inflation. It's still way higher than their magical 2% target, and we might get hit with more rate hikes if prices heat up again or people don't keep their spending in check.
Even though the rate hikes might be tapping out soon, the burning question is when we'll start seeing rate CUTS. Word on the street from economists is that we might see a rate drop in mid 2024.
Between now and the last announcement of 2023 on December 6th, the Bank of Canada will be watching key stuff like inflation, jobs, what folks are spending, and GDP.
They're on the lookout for any signs that the economy is still sizzling. So, it's not exactly the end of the road, but hey, at least we can spot the light at the end of the tunnel.
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