The Facts
- The Bank of Canada (BOC) on Wednesday raised its interest rate by another 0.25% to a benchmark rate of 4.5%, the highest it has been in 15 years. However, the BOC also became the first major central bank to say it would likely halt further increases.
- The latest increase, which was in line with expectations, means the bank has increased rates by 425 basis points in 10 months. Canada has seen inflation drop from its 8.1% peak to 6.3% as of December, though it's far from the target of 2%.
- BOC Governor Tiff Macklem, however, said any decision on pausing future rate hikes is "conditional" on inflation continuing to drop. The bank projects inflation to "decline significantly" to 3% by mid-2023 and to 2% by next year. But that, too, depends on the cost of energy and other goods.
Sources Split
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The Spin
Pro-establishment narrative
The goal of BOC has always been, and continues to be, fighting inflation, which means slowing the economy through various tools. Inflation is still at over 6%, so while the bank will pause any further rate hikes for the time being, it has rightly left the door open to further increases down the road.
Establishment-critical narrative
Inflation has decreased, but not because of the BOC’s rate hikes. Rather lower commodity prices and the clearing of supply chains have indicated that inflation was transitory after all. With Canadians feeling the pressure of the bank's monetary tightening, the BOC shouldn’t even think about more hikes moving forward.
© 2026 Improve the News Foundation. All rights reserved.Version 7.17.1
© 2026 Improve the News Foundation.
All rights reserved.
Version 7.17.1