The Bank of Canada reduced its overnight target rate by 50 basis points to 3.25% on 11 December 2024, delivering its fifth rate cut of the year and completing a cumulative 175 basis points of monetary policy easing through 2024. The Governing Council's decision represents the second consecutive reduction of half a percentage point and brings the policy rate to its lowest level since 2022. The BoC announced the decision in a press release published on its website.
The Bank cited the presence of excess supply in the Canadian economy and a growth outlook tilted towards softer performance as the principal factors underpinning the decision to ease at an accelerated pace. The Governing Council noted that it had reduced the policy rate substantially since June and said it would evaluate the need for further reductions one decision at a time.
FURTHER GUIDANCE
The Governing Council said it would evaluate further reductions one decision at a time, and Governor Tiff Macklem said that with the policy rate now substantially lower, the Bank anticipated a more gradual approach to monetary policy if the economy evolved broadly as expected.