The Bank of Canada has reduced its key interest rate by 25 basis points to 4.50% for the second consecutive time after aggressive interest rate hikes.

The Bank of Canada revised its growth forecast for 2024 downward to 1.2% from the previous 1.5% due to lower consumption, indicating concerns about economic performance.

The Governing Council of the Bank of Canada is closely monitoring inflation factors for future monetary policy decisions, emphasizing the importance of inflation management.

Inflation is expected to reach the target of 2% sustainably in the second half of 2025, indicating a long-term inflation management strategy.

Bank of Canada cut its benchmark interest rates by 25 basis points to 4.50% in line with market expectations, aiming to address inflation and weakening economic conditions.

This marks the second consecutive rate cut in two months after maintaining rates at 5% for nearly a year, reflecting a shift in response to economic indicators.

Canadian economic growth reached about 1½% in the first half of the year, but potential output exceeds GDP growth due to robust population growth, highlighting underlying economic dynamics.

The Bank of Canada also lowered the economic growth forecast for 2024 from 1.5% in April to 1.2%, signaling a more cautious outlook on the economy.

Multiple companies across different sectors like Pet Valu Holdings, Mty Food Group, and Canada Goose Holdings closed lower, reflecting broader market impacts.

The Information Technology Capped Index dropped by 2.17%; Celestica Inc and Shopify Inc saw significant declines, indicating sector-specific challenges.

Healthcare stock Bausch Health Companies fell over 23%; Tilray Inc also ended lower, showing specific stock reactions to the economic changes.

Consumption decreased due to reduced demand for motor vehicles and foreign travel, along with households allocating more income to debt payments, reflecting shifting consumer behaviors.