Bank of Canada Cuts Key Interest Rate for First Time in Four Years, Signaling Shift in Inflation Strategy

The Bank of Canada has reduced its key interest rate for the first time in over four years, lowering it by a quarter percentage point to 4.75%. Governor Tiff Macklem cited increased confidence that inflation is moving closer to the bank's two percent target, supported by various indicators showing reduced price pressures. He indicated the possibility of further rate cuts if inflation continues to ease and confidence in meeting the inflation target strengthens. However, Macklem emphasized that interest rate decisions will be made on a meeting-by-meeting basis. This move marks a significant shift in the central bank's efforts to control inflation over the past two years.