Bank of Canada Hikes Rates, Becomes First Major Central Bank To Signal Pause  

 

• The Bank of Canada on Wednesday hiked its key interest rate to 4.5%, the highest level in 15 years, and became the first major central bank fighting global inflation to say it would likely hold off on further increases for now.
• The 25-basis-point rise matched analysts' expectations. The bank has lifted rates at a record pace of 425 basis points in 10 months to tame inflation, which peaked at 8.1% and slowed to 6.3% in December, still more than three times the 2% target.
• "We are turning the corner on inflation," Bank of Canada Governor Tiff Macklem told reporters. "We are still a long way from our target, but recent developments have reinforced our confidence that inflation is coming down."
• Canada's approach has until now matched that of the U.S. Federal Reserve, which ratcheted up its own target policy rate by 4.25 percentage points over the last year. The Fed is set to slow the pace of its hikes at a Jan. 31-Feb. 1 policy meeting and signal its battle against inflation is far from over.

(Source: Reuters)