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Bank of Canada Signals No Rate Hikes Until at Least 2023

  • Macklem pledges to keep borrowing costs lower for longer
  • Weekly purchases of billions in government bonds to continue
Updated on

The Bank of Canada pledged for the first time to keep interest rates at historically low levels for years to come to help spur the nation’s economic recovery.

At a decision Wednesday, the central bank left its overnight rate at 0.25%, what policy makers led by Governor Tiff Macklem consider the lowest it can go. They also promised to keep the benchmark there until unemployment falls closer to pre-pandemic levels and inflation returns sustainably to their 2% target. That would suggest rates won’t rise until after 2022, based on the bank’s new quarterly forecasts.