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Economics

Bank of Canada Signals Hikes Are Imminent After Omicron Wave

  • Macklem bucks market expectations, holds rate at 0.25% for now
  • Loonie, bond yields moved lower ahead of Fed decision
Tiff Macklem, governor of the Bank of Canada.
Tiff Macklem, governor of the Bank of Canada.Photographer: Adrian Wyld/Canadian Press/Bloomberg
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The Bank of Canada held interest rates unchanged but signaled it will tighten monetary policy in coming weeks to contain the highest inflation in three decades.

Policy makers led by Governor Tiff Macklem left the central bank’s key rate at 0.25%, where it’s been since March 2020. Still, Macklem warned higher borrowing costs are imminent in an economy at full capacity that is no longer in need of emergency levels of stimulus.