Bank of Canada Raises Interest Rates … Again

Jon Banking

For the second time in less than two months, the Bank of Canada has raised interest rates.
On Wednesday, the central bank raised its overnight lending rate by a quarter per cent to 1 per cent.
The move surprised many who weren’t expecting a rate increase until later this Autumn.
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Just like last time, the rationale behind higher rates was centred around the Bank of Canada’s belief that the economy is growing faster than expected.
Bank of Canada Governor Stephen Poloz said, ‘The level of GDP growth is now higher than the bank expected.’
Of course, this assumes that GDP measures anything.
The Canadian loonie surged after the announcement, climbing to 82 cents U. S.

This post was published at Ludwig von Mises Institute on September 7, 2017.