ANALYSIS: Bank of Canada Still in Rate-Hike Mode as Recession Indicators Mount

The Bank of Canada painted a picture of a worsening economy, but not one that needs a cut in interest rates quite yet.

Bank of Canada governor Tiff Macklem speaks at a news conference following an interest rate announcement, in Ottawa on Oct. 25, 2023. The central bank held its policy rate at 5 percent on Dec. 6, 2023. The Canadian Press/Adrian Wyld

OTTAWA—The Bank of Canada in its Dec. 6 rate announcement painted a picture of a worsening economy but not one that needs a cut in interest rates quite yet. The central bank pointed to a few ongoing areas of strength and concern, saying it “remains prepared to raise the policy rate further if needed.” 

But economists don’t see a need for further rate hikes as recessionary conditions build. A key measure of worry cited is gross domestic product (GDP) on a per capita basis, which Oxford Economics (OE) noted has been in a recession since late 2022.