Bank of Canada Raises Overnight Rate to 1.75%; Cites New Trade Policy and Growing Economy Oct 25th

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Bank of Canada Raises Overnight Rate to 1.75%; Cites New Trade Policy and Growing Economy
Bank of Canada Governor Stephen Poloz at a press conference following an interest rate announcement in April. 
After months of speculation, indeed, the Bank of Canada decided to raise its benchmark interest rate by 25 basis points this morning. This quarter-point hike brings the target for the overnight rate to 1.75 per cent.
This is the third time the central bank has raised rates this year, and the fifth time since July 2017. This rate hike most likely means commercial banks will soon hike their prime rates, making borrowing costs more expensive for anyone with a floating rate loan, like a variable-rate mortgage or a line of credit.
New trade policy boosts confidence in economy, but Bank still has concerns
In a statement released shortly after the announcement, the Bank lists several reasons for raising rates this time, including the finalization of the new trade agreement to replace NAFTA.  The Bank states, “The global economic outlook remains solid. The US economy is especially robust and is expected to moderate over the projection horizon… The new US-Mexico-Canada Agreement (USMCA) will reduce trade policy uncertainty in North America, which has been an important curb on business confidence and investment…

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