Bank of Canada Raises Prime Lending Rate by 50 bps

The Bank of Canada raised its benchmark rate by a further 50 basis points on Wednesday, bringing it to 4.25% in a move that signalled the first time it has hit the 4% mark since 2008.

However, The Bank of Canada’s “very encouraging” language in its latest policy rate announcement indicates that it could be ready to hit pause on its series of rate hikes, according to CIBC deputy chief economist Benjamin Tal.

It wouldn’t be unreasonable, for the Bank to keep its interest rates at current levels before cutting in early 2024, Tal said, despite bond yields having declined in recent weeks in the expectation of rates dropping in 2023.