The Bank of Canada reduced its overnight target rate by 25 basis points to 4.25% on 4 September 2024, delivering its third consecutive cut of that magnitude as the Governing Council assessed that the domestic economy was expanding below its potential and that inflation was declining toward the Bank's 2% target. The decision extended a policy-easing cycle that the Bank had initiated at its preceding meetings.
The Bank's post-decision statement noted that excess supply in the economy continued to put downward pressure on inflation.
Even after three consecutive cuts, the overnight rate at 4.25% remained above the near-zero levels that prevailed from 2020 to 2022.