Bank of Canada increases interest rate 8th time in 1 year. ChatGPT responds
It's the 8th time the Bank of Canada has raised interest rates since the beginning of last year.
If you're considering borrowing money for a big ticket item, like a home or a car, this is not the news you want to hear. The cost of borrowing money has gone up again.
The Bank of Canada just increased its target for the Overnight Rate to 4.5 from 4.25, with the Bank Rate at 4¾% and the Deposit Rate at 4½%.
We're told it's to slow inflation.
Bank of Canada:
"The Bank estimates Canada’s economy grew by 3.6% in 2022, slightly stronger than was projected in October. Growth is expected to stall through the middle of 2023, picking up later in the year. The Bank expects GDP growth of about 1% in 2023 and about 2% in 2024, little changed from the October outlook... Inflation has declined from 8.1% in June to 6.3% in December, reflecting lower gasoline prices and, more recently, moderating prices for durable goods".
Putting the question to CHATgpt, "Does higher interest slow inflation or increase bank profits?" this is the response ExNews.net received
"Higher interest rates can slow inflation by making borrowing more expensive, which can reduce spending and slow down economic growth. However, higher interest rates can also increase bank profits by allowing them to charge higher rates on loans and earn more on their investments. It's a trade-off, where the central bank's monetary policy may prioritize one over the other depending on the economic situation."
The next scheduled date for a Bank of Canada overnight rate announcement is March 8, 2023.