Bank of Canada Increases Interest Rates by Half-Percentage Point, Biggest Jump in Decades

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.

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