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Key interest rate set at 4 per cent

The Bank of Canada, confronted by cascading losses on financial markets, cuts its key interest rate by one-quarter of a percentage point to four per cent. The Canadian central bank's scheduled decision came less than an hour after the U.S. Federal Reserve Board handed down a surprising three-quarter-point cut in its benchmark policy rate.

The Fed said it's cutting the federal funds rate -- the interest that banks charge each other on overnight loans -- to 3.5 per cent, down by three-fourths of a percentage point, from 4.25 per cent.

The Fed action is the most dramatic signal it can send -- that it is concerned about a potential recession in the United States. It marked the biggest one-day move by the central bank in recent memory.

January 22, 2008 in Arranging Mortgage Financing | Permalink

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Comments

The States are clearly in panic mode. Hopefully with the Bank of Canada's rate cut, the economy woes down south do not trickle northward.

Posted by: Stephen Winters | Jan 22, 2008 8:20:06 PM

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