Bank of Canada raises key interest rate, says another hike possible
The Bank of Canada increased its key policy rate to 2.5 per cent, delivering its first rate hike in more than three years. Officials warned that further increases could be necessary to prevent soaring energy costs from driving broader inflation. Economists and reports indicate that higher borrowing costs will depress the already bleak housing market while managing oil-price shocks. Meanwhile, the U.S. Federal Reserve left its benchmark interest rate unchanged during the same period.
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- ✓ The Bank of Canada raised its key interest rate by 25 basis points to 2.5 per cent.
- ✓ This decision marks the first rate hike by the central bank in more than three years.
- ✓ Officials warned that further increases could be needed to contain oil-price shocks and broader inflation.
- ✓ The U.S. Federal Reserve left its benchmark interest rate unchanged.
What changed
The Bank of Canada increased its policy rate for the first time in more than three years to 2.5 per cent.
Live updates
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Bank of Canada raises key interest rate to 2.5%
The Bank of Canada increased its key policy rate to 2.5 per cent, delivering its first rate hike in more than three years. Officials warned that further increases could be necessary to prevent soaring energy costs from driving broader inflation. Economists and reports indicate that higher borrowing costs will depress the already bleak housing market while managing oil-price shocks. Meanwhile, the U.S. Federal Reserve left its benchmark interest rate unchanged during the same period.
Why it matters
The central bank last raised its rate in July 2023, keeping policy steady until this shift. This decision reflects growing pressure from oil-price shocks and worsening inflation projections. Observers note that while energy producers in regions like Alberta hold advantages, higher rates introduce costly catches for the broader economy.
What is confirmed
- The Bank of Canada raised its key interest rate by 25 basis points to 2.5 per cent.
- This decision marks the first rate hike by the central bank in more than three years.
- Officials warned that further increases could be needed to contain oil-price shocks and broader inflation.
- The U.S. Federal Reserve left its benchmark interest rate unchanged.
Still unconfirmed
- Economists argue that the central bank's first rate hike in three years will not be the last.
What to watch next
- Upcoming central bank policy announcements and inflation data releases
- Housing market indicators responding to elevated mortgage costs
confidence 100%Sources used for this update (24)
- finance.yahoo.com — Yahoo Finance - Stock Market Live, Quotes, Business & Finance News
- www.bankofamerica.com — Bank of America - Banking, Credit Cards, Loans and Merrill ...
- www.ctvnews.ca — U.S. midterms: Republicans shy away from Trump ahead of vote
- www.theglobeandmail.com — Canadian astronaut Joshua Kutryk having a blast at the International Space Station - The Globe and Mail
- Reuters — Bank of Canada raises key interest rate, says another hike possible
- CBC — Higher mortgage costs set to depress already 'bleak' housing market
- WSJ — Growth Plays Key Supporting Role in Bank of Canada Rate-Hike Decision
- Bloomberg — Bank of Canada Hikes to 2.5%, Says More Could Be Needed
- The Globe and Mail — Bank of Canada raises key interest rate to 2.5%; U.S. Federal Reserve leaves benchmark interest rate unchanged
- Global News — How the latest interest rate hike could affect everyday Canadians
- The Globe and Mail — BoC hikes rate to 2.5%, suggests more may be needed to contain oil-price shock
- Bloomberg — Bank of Canada Rate Decision Live Updates
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