The S&P/TSX Composite Index dropped as much as 1.6 per cent immediately after the Bank of Canada surprised economists with its largest rate increase since 1998. Economists widely expected a three-quarter-point hike.
In a news conference, Governor Tiff Macklem said “the best way to protect people from high inflation is to eliminate it” and he stressed that the central bank is committed to getting “price changes back to normal.” Markets in New York ultimately ended lower Wednesday as investors weighed the implications of the latest U.S. inflation figures. The S&P 500 closed down 0.45 per cent, the Dow Jones Industrial Average fell 0.67 per cent and the tech-heavy Nasdaq was closed 0.15 per cent lower after spending much of the day in the green.