News Analysis
OTTAWA—The Bank of Canada is trying to remove excess demand from the economy, and contrary to what some economists believe, it says it can achieve the “soft landing” of getting inflation back to its 2 percent target while avoiding an economic recession.
Canada’s central bank upped its trendsetting interest rate by 100 basis points—a full percentage point—to 2.5 percent on July 13 in a move that surprised the markets, as it was the largest one-time rate increase since 1998. A move of three-quarters of a percentage point had been widely expected after the U.S. Federal Reserve raised its federal funds target range by 75 basis points on June 15….