Home Business & Economy Banking & Finance Next Bank of Canada rate announcement Oct 25

Next Bank of Canada rate announcement Oct 25

The economy seems to have calmed down somewhat, but many sectors still hurting.

bank of canada, october 25, 2023
Next Bank of Canada monetary policy announcement coming Oct 25, 2023.
 GROWING NATURAL FOOD IN URBAN SPACES

Tuesday October 24, 2023 | VICTORIA, BC

by Mary P Brooke | Island Social Trends [Last updated October 25, 2023]

Link to the October 25, 2023 Monetary Policy Livestream

October 25, 2023 update: Click here for article about the Bank of Canada interest rate remaining steady at 5%


The next Bank of Canada interest rate announcement is coming tomorrow, October 25. At 10 am EDT (7 am here on the west coast).

Then at 11 am EDT (8 am Pacific) the Governor and the Senior Deputy Governor hold a press conference to discuss the contents of the Monetary Policy Report. | Click here to see October 25 announcement.

bank of canada, tiff macklem, calgary
Bank of Canada Governor Tiff Macklem addressed the Calgary Chamber of Commerce on Sept 7, 2023. [livestream]

On eight scheduled dates each year, the Bank of Canada announces the setting for the overnight rate target in a press release explaining the factors behind the decision.

Four times a year, Governing Council presents the Monetary Policy Report: the Bank’s base-case projection for inflation and growth in the Canadian economy, and its assessment of risks.

Latest increases:

The bank rate has been increased 10 times since March of last year, up from 0.25% before the upward trajectory began to where it is now at 5%. The most recent increase was on July 12.

The rate was not increased at the last announcement on September 6. The rate remained at 5% on October 25 as well.

A curious time:

The economy seems to have calmed down somewhat, but many sectors still hurting.

And the signals for bank decision-makers are not as clear and concise as in previous decades. Job numbers have held fairly well and up until the 10th interest rate increase consumers kept spending beyond expected levels.

david eby, july 2023
Premier David Eby at the meeting of Canada’s Premiers in Winnipeg, July 12, 2023. [livestream]

The blunt tool of increasing unemployment through economic pressures on the corporate sector is perhaps now outmoded for this time in economic history. And within that approach it is small businesses that experience the toughest squeeze (note the number of businesses struggling to still pay back their CEBA loans from the pandemic phase).

Ahead of the July and September rate announcements the political leadership around the country weighed in to express how much their citizens were hurting. BC Premier David Eby and Ontario Premier Doug Ford came to the defense of their struggling residents and economies. This month, very little of that sort of talk.

power outage

Cooling the economy:

The grinding pressure on the full scope of the economy has been intentional by the bank, as their (only) way to tamp down inflation. The Bank wants to see inflation held between 2% and 3%.

When the central bank increases their rate of course the banks and lenders follow with increases as well.

Most of the acknowledged financial pain from interest rate increases has been endured by households (many at record-high levels of debt), mortgage holders (many of whom are surpassing their financing threshold), renters (who are at the mercy of landlords who carry upward mortgage costs), and small business (losing inflation-stressed customers and carrying operating debt).

Not there yet:

On September 7 in Calgary, Macklem said ‘rates will come down but we’re not there yet’, during his address to the Calgary Chamber of Commerce.

ist main, langford
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