The Conference Board of Canada - AERIC Inc.

01/24/2024 | News release | Distributed by Public on 01/24/2024 09:57

The Bank of Canada To Hold the Overnight Rate at 5 per Cent

  • The Bank of Canada decided to hold its target for the overnight rate at 5 per cent, with the Bank rate at 5.25 per cent, and the deposit rate at 5 per cent. This is in line with our latest national forecast, and the result of a slowing economy.
  • The Bank expects Canadian economic growth to remain weak in 2024 before picking up in 2025. They forecast GDP growth of 0.8 per cent in 2024 and 2.4 per cent in 2025, similar to our most recent national forecast of 0.6 per cent growth in 2024 and 2.3 per cent growth in 2025.
  • Higher interest rates are having the expected effect on the labour market. The unemployment rate trended upward through 2023, peaking at 5.8 per cent to round out the year.
  • The Bank is continuing with its quantitative tightening. As of today's announcement, the Bank's Government of Canada bond holdings are sitting just under $280 billion.
  • The Governing Council remains strong in its commitment to restoring price stability, saying that it is concerned with the persistence in underlying inflation and wants to see further easing in core CPI inflation while focusing on the balance between supply and demand in the economy, as well as inflation expectation, wage growth, and corporate pricing behaviour.