Bank of Canada raises overnight rate to 3¾%, signals pause in rate hikes

Bank Rate now at 4%, deposit rate at 3¾%

Bank continues quantitative tightening policy

The Bank of Canada today increased its target for the overnight rate to 3¾ with the Bank Rate at 4 and the deposit rate at 3¾. The Bank is also continuing its policy of quantitative tightening (QT).

The Bank's decision to drop its tightening bias today is the first step toward interest rate cuts. We continue to think that the banks forecasts for the economy are too optimistic. Its why he said they werent going to raise rates back in 2022. His job isnt to be honest its to meet metrics and lowering/raising rates is just one tool and the biggest one in the toolbox.

The 8 to 4 drop was the easy part. The 4 to 2 is going to be the really hard part. Never in modern financial history have they been able to beat inflation without having to raise rates.