Market Wire: Bank of Canada surprises with a bigger and more dovish hike than expected
The Bank of Canada lifted its benchmark overnight rate by half a percentage point to 4.25 percent this morning, while telegraphing an imminent pause in its monetary tightening cycle. The decision surprised markets that had anticipated a smaller quarter point move – but softened the blow by lowering expectations further out. In the statement accompanying the decision, the central bank said “growth in the third quarter was stronger than expected, and the economy continued to operate in excess demand,” observing that “Canada’s labour market remains tight, with unemployment near historic lows”. Signs of a slowdown were flagged: “While commodity exports...