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The Bank of Canada Increases Interest Rates

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The Bank of Canada has moved its key interest rate up by another half a percentage point to 4.25 per cent, while signalling it may press “pause” on its aggressive rate hike cycle.  online news

This is the seventh consecutive increase since March, bringing the rate to as high as it was back in 2008.

But the central bank says there’s “growing evidence” that higher interest rates are restraining demand in the economy.

That’s a departure from previous announcements where the bank said more hikes should be expected.

Western University economics professor Stephen Williamson says the bank is likely to make this its last rate hike.

The Canadian Press. All rights are reserved.

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Notes from APS Radio News

From the early part of March 2020 to May of this year, the US Federal Reserve added over $4.5 trillion to its holdings, by purchasing each month billions of dollars’ worth of corporation and government bonds.

A number of other central banks, including the Bank of Japan and the European Central Bank followed similar policies.

A number of economists say that the combination of lockdowns, which closed millions of small and medium-sized businesses, and massive infusions of money into economies has contributed to noticeably greater rates of inflation.

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