10th rate hike by central bank since March 2022
Jenna Benchetrit · CBC News · Posted: Jul 12, 2023 8:11 AM MDT | Last Updated: 8 minutes ago
The Bank of Canada raised its benchmark interest rate by 25 basis points on Wednesday, marking the first time since April 2001 that the figure hit five per cent.
The move was expected by economists after Statistics Canada released its June labour force survey last week, which showed that Canada added 60,000 jobs last month — further contributing to an overheated economy.
Following the announcement, experts diverged on whether Canadians could expect another increase after the summer. Trading in investments known as swaps — which bet on future central bank moves — imply there is a better than 75 per cent chance of another small hike at the bank's next meeting on Sept. 6.
"While the Bank of Canada didn't shut the door to more monetary tightening, Canadians might finally be seeing some light at the end of the rate-hiking tunnel," Desjardins economist Royce Mendes wrote in a note.
Meanwhile, CIBC economist Andrew Grantham wrote that "a continued hawkish tone within today's statement suggests that risks are skewed towards another hike after the summer."
Wednesday's rate hike marks the 10th by the central bank since March 2022. It hit pause on those hikes in January for a few months to determine whether the economy had sufficiently cooled, then resumed its campaign in June.