Judging that Canada’s economy is still in “excess demand” and needs further chilling to reduce inflation, the central bank increased the target for its trend-setting overnight rate to 3.25 per cent. (The Logic)

Talking point: A 0.75-point increase would have been a huge deal in early 2022, when the overnight rate was still at 0.25. But after the bank increased the rate a full point in July, the move today comes across as easing up—if only slightly. Economic growth was a bit slower in the second quarter than the bank had projected and housing markets are calming, but overall labour markets are still tight and both consumer and business spending have continued to increase. Also, the inflation rate was 7.6 per cent in the last reading, several times the Bank of Canada’s target of about two per cent, so the bank’s governing board “still judges that the policy interest rate will need to rise further,” its announcement said. The next decision is due Oct. 26.