As expected, the Bank of Canada raised its key rate seventy five basis points on Wednesday morning.
Heading into the announcement, a majority of financial analysts felt this would be the likely move, to trim the impact of inflationary pressure. This is the fifth rate hike in 2022 and brings the key rate to 3.25% which is the highest since 2008.
While Bank of Canada Governor Tiff Macklem has been talking about an economic “soft landing” as a goal, analysts are noting that this recent raise pushes rates into “restrictive territory” which is where borrowing costs weigh on economic growth.
The next Bank of Canada announcement is in October where, based on the economic data, it will have to make the decision on how hawkish it should remain. There is much reporting in major newspapers of the slowing Canadian economy in the second half of 2022. There is major attention right now around the pullback in housing prices as one major example.
Watch RealAgriculture’s Shaun Haney on RFDTV talk about the interest rate increase in Canada: