Bank of Canada Cuts Rate by 50 Basis Points to 3.75%, Largest Cut This Year

Oct 23, 2024, 01:50 PM

The Bank of Canada has cut its key interest rate by 50 basis points to 3.75%, marking its largest rate cut this year and the first larger-than-usual move in more than four years. This is the fourth consecutive rate cut, following three prior reductions of 25 basis points. The decision was made in response to a slowing economy and a return of inflation to the 2% target. Governor Tiff Macklem stated, 'We took a bigger step today because inflation is now back to the 2 percent target and we want to keep it close to the target.' The Bank signaled that if the economy evolves as forecasted, further rate cuts are expected. The central bank maintained its 2024 growth forecast at 1.2% and expects headline CPI inflation to average 2.5% in 2024.