Bank of Canada Reduces Policy Rate to 4.5 Percent
The Bank said in a news release that with broad price pressures continuing to ease and inflation expected to move closer to 2 percent, Governing Council decided to reduce the policy interest rate by a further 25 basis points.
According to the release, CPI inflation moderated to 2.7 percent in June. Broad inflationary pressures are easing. The bank's preferred measures of core inflation have been below 3 percent for several months and the breadth of price increases across components of the CPI is now near its historical norm.
The bank's preferred measures of core inflation are expected to slow to about 2.5 percent in the second half of 2024 and ease gradually through 2025, the release said.
Meanwhile, the bank forecasts GDP growth of 1.2 percent in 2024, 2.1 percent in 2025, and 2.4 percent in 2026.
The strengthening economy will gradually absorb excess supply through 2025 and into 2026, it noted.
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