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As expected, Bank of Canada holds interest rate steady at 5%

Bank of Canada governor Tiff Macklem and other members of the bank's leadership group elected to hold the central bank's trendsetting interest rate steady.

Bank of Canada governor Tiff Macklem and other members of the bank's leadership group elected to hold the central bank's trendsetting interest rate steady.

Photo: La Presse canadienne / Sean Kilpatrick

RCI

Economists starting to think rate cuts will start happening in 2024

The Bank of Canada decided to keep its benchmark interest rate steady at five per cent.

The move was widely expected, as after raising its trendsetting rate 10 times since early 2022 to slow down runaway inflation, the bank has been signalling recently that it thinks it may be nearing the end of that hiking cycle.

The bank's rate influences the rate that Canadians get on things like variable-rate loans and some savings accounts.

The bank raised the rate to its current level in July, but has stood still ever since, as the Canadian economy shows signs of cooling.

The slowdown in the economy is reducing inflationary pressures in a broadening range of goods and services prices, the bank said in announcing its decision.

Economists who monitor the central bank think it is indeed now done with hiking, and expectations are that the bank will in fact start to cut its rate some time in 2024.

More to come.

Pete Evans (new window) · CBC News

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