Bank of Canada Raises Key Interest Rate to 5%

The Bank of Canada has increased interest rates by 25 basis points, raising the rate to 5%, the highest since 2001. This decision, although expected, has impacted the Canadian dollar amidst weaker U.S. inflation and dollar. The Bank of Canada has also adjusted its inflation target, now expected to be met by mid-2025, six months later than previously anticipated. Experts Robert Capsic and Jim Thorne provide insights on the implications for portfolios and household wealth, noting that the policy may need to remain tight for some time.

What was the recent change in the Bank of Canada's interest rate?

• Increased by 50 basis points

• Decreased by 25 basis points

• Increased by 25 basis points

• No change

How did the Canadian dollar react to the interest rate decision?

• It fluctuated wildly

• It strengthened

• It weakened

• It remained stable

When does the Bank of Canada now expect inflation to return to target?

• Mid 2025

• End of 2024

• End of 2025

• Early 2025

What was the market's expectation regarding the Bank of Canada's rate decision?

• No change in rates

• An increase by 50 basis points

• An increase by 25 basis points

• A decrease in rates

Why did the Bank of Canada resume rate hikes after a pause?

• To decrease inflation immediately

• To stimulate economic growth

• To tighten insufficiently tight policy

• To align with U.S. policy