Financial News: Bank Of Canada Cuts Interest Rates By Quarter

Bank Of Canada Cuts Interest Rates By Quarter Point For Third Straight Meeting

09/04/2024 - 09:59:00 (RTTNews)

(RTTNews) - For the third straight meeting, the Bank of Canada on Wednesday announced that is decided to lower interest rates by another quarter point.

The Bank of Canada announced its widely expected decision to reduce its target for the overnight rate by 25 basis points to 4.25 percent, with the Bank Rate at 4.50 percent and the deposit rate at 4.25 percent.

The Canadian central bank's Governing Council said it decided to continue lowering rates due to continued easing in broad inflationary pressures.

The accompanying statement noted inflation slowed further to 2.5 percent in July, with high shelter price inflation starting to slow.

"Excess supply in the economy continues to put downward pressure on inflation, while price increases in shelter and some other services are holding inflation up," the Bank of Canada said.

"Governing Council is carefully assessing these opposing forces on inflation," the bank added. "Monetary policy decisions will be guided by incoming information and our assessment of their implications for the inflation outlook."

With regard to the Canadian economy, the Bank of Canada noted the economy grew by 2.1 percent in the second quarter, led by government spending and business investment.

"This was slightly stronger than forecast in July, but preliminary indicators suggest that economic activity was soft through June and July," the bank said.

The Canadian central bank also said the labor market continues to slow, with little change in employment in recent months, but noted wage growth remains elevated relative to productivity.

The Bank of Canada's next interest rate announcement is scheduled for October 23, when the bank will also publish its next full outlook for the economy and inflation, including risks to the projection.

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