As expected by most economists in Canada, the Bank of Canada has reduced its target for the overnight rate to 3.75%, with the bank rate at 4% and the deposit rate at 3.75%. In a statement, the bank acknowledged inflation declined significantly from 2.7% in June to 1.6% in September. “Inflation in shelter costs remains elevated but has begun to ease. Excess supply elsewhere in the economy has reduced inflation in the prices of many goods and services,” reads the statement. “The drop in global oil prices has led to lower gasoline prices. These factors have all combined to bring inflation down.” “The Bank’s preferred measures of core inflation are now below 2.5%. With inflationary pressures no longer broad-based, business and consumer inflation expectations have largely normalized.” More to come....
