Many pundits expected the Bank of Canada to increase their interest rates in the general announcement. However, the nation’s central bank stunned the entire financial world by announcing a supersized increase of 100 basis points or 1% on its interest rates, bringing the total increase to 2.5%.
This has been the bank’s biggest increase since 1998 and it was the fourth spike in a planned four-step action strategy to help reduce soaring inflation. The Bank of Canada has an inflation rate target of 2%, and current projections place that value closer to 8% at least until the end of the summer.
It’s important to note that the Bank of Canada announces overnight rate changes eight times per year. The schedule for the rest of 2022 looks like this:
- Wednesday, September 7
- Wednesday, October 26 (same day as monetary policy report is published)
- Wednesday, December 7
You can read the entire official Bank of Canada announcement here.
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