OTTAWA—The Bank of Canada pulled the trigger on its biggest rate increase in over two decades and said further rises are necessary to tame domestic spending and keep long-term inflation expectations anchored closer to its 2% target.
The Bank of Canada lifted its target for the overnight rate by half a percentage point from 0.50% to 1.0%. In its latest policy decision, the central bank also said it would begin reducing the assets on its balance sheet, which expanded as it made large-scale asset purchases for the first time to stabilize financial markets during the pandemic. That process would begin April 25.
