Bank of Canada Cuts Policy Rate to 2.50%
The Bank of Canada lowered its overnight rate target to 2.50%, a 25 basis point cut. This marks the first rate reduction from the Bank since March. The move comes amid slowing Canadian and global economic growth and a weaker labour market that has led to rising unemployment. In addition, Canada’s GDP declined in the second quarter due to tariffs and trade uncertainty. However, according to the Bank, consumption and housing activity both grew at a healthy pace.
Despite these challenges, the Bank noted, “With a weaker economy and less upside risk to inflation, Governing Council judged that a reduction in the policy rate was appropriate to better balance the risks. Looking ahead, the disruptive effects of shifts in trade will continue to add costs even as they weigh on economic activity. Governing Council is proceeding carefully, with particular attention to the risks and uncertainties”.
For buyers and sellers, this rate cut could bring renewed momentum into the housing market heading into the fall. Lower borrowing costs may improve buyers’ affordability and encourage more market activity. At the same time, sellers could see an uptick in demand. That said, ongoing global uncertainty and slow economic activity may temper confidence in the coming months.
Bank of Canada’s 2025 Policy Interest Rate Announcement Schedule
Bank of Canada announces its decision for the overnight rate target eight times a year, typically on a Wednesday. The schedule for 2025 is as follows:
Wednesday, January 29
Wednesday, March 12
Wednesday, April 16
Wednesday, June 4
Wednesday, July 30
Wednesday, September 17
Wednesday, October 29
Wednesday, December 10
Read the full interest rate announcement below:
The Bank of Canada today reduced its target for the overnight rate by 25 basis points to 2.5%, with the Bank Rate at 2.75% and the deposit rate at 2.45%.
After remaining resilient to sharply higher US tariffs and ongoing uncertainty, global economic growth is showing signs of slowing. In the United States, business investment has been strong but consumers are cautious and employment gains have slowed. US inflation has picked up in recent months as businesses appear to be passing on some tariff costs to consumer prices. Growth in the euro area has moderated as US tariffs affect trade. China’s economy held up in the first half of the year but growth appears to be softening as investment weakens.
Highlights in Chinese language:
加拿大央行利率决策中文要点：
📉 利率调整
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加拿大央行将隔夜利率目标下调 25 个基点至 2.5%，银行利率为 2.75%，存款利率为 2.45%。
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理由：经济放缓、通胀风险减弱，需要更好地平衡风险。
🌍 全球经济背景
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美国：企业投资仍强劲，但消费者谨慎，就业增长放缓，通胀因关税成本传导而上升。
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欧洲：增长受美关税影响而放缓。
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中国：上半年表现稳健，但投资疲软，增长趋缓。
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全球：油价基本稳定，金融条件宽松（股市上涨、债券收益率下降），加元对美元保持稳定。
🇨🇦 加拿大国内情况
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GDP：第二季度下降约 1.5%，主要因关税和贸易不确定性；出口暴跌 27%。
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投资与消费：企业投资下降；消费和住房活动仍保持健康。
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就业：近两个月就业减少，尤其是受贸易影响行业；失业率升至 7.1%，工资增速放缓。
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通胀：8 月 CPI 为 1.9%；剔除税收为 2.4%；核心通胀近期维持在 2.5% 左右。
🔮 前景展望
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未来贸易摩擦和供应链调整将继续增加成本，同时拖累经济活动。
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央行将密切关注：
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出口在关税背景下的表现
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对投资、就业和家庭支出的溢出效应
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成本传导至消费价格的程度
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通胀预期的变化
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目标：在全球动荡中保持物价稳定，支持经济增长。
