The Bank of Canada released a summary of its Governing Council meetings on Wednesday, providing the public and financial institutions with more insight into the central bank’s decision to raise its key interest rate on Jan. 25. The Governing Council, made up of six members including Bank of Canada Governor Tiff Macklem and his deputies, met five times starting on Jan. 18, before their decision on Jan. 25 to raise the overnight rate by a quarter of a per cent to 4.5 per cent. Discussions at these meetings did look at the possibility of pausing the rate at 4.25 per cent. “The case for leaving the policy rate at 4.25 per cent was that developments with respect to both the economy and inflation were beginning to move in the right direction and that policy had been forceful and just needed more time to do its work,” reads the summary released on Wednesday.
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Ultimately, the council’s consensus to raise the rate was due to a tight labour market and concern over stronger-than-expected economic growth in the third and fourth quarters of 2022. Despite this, there was also consensus to indicate a pause in the bank’s hikes to measure the full effect of its forceful tightening. Members of the council viewed the tight labour market as an indication the economy remains in excess demand, and a project that rebalancing the labour market may take longer than usual as businesses continue to face labour shortages.
Source: ctvnews.ca
Friday, May 1, 2026
