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 were the expectations of the market regarding the Bank of Canada's rate decision?

What factors contributed to the Bank of Canada's decision to increase interest rates?