The Bank of Canada on Wednesday lowered its benchmark interest rate by a quarter-percentage point, with the policy rate now standing at 4.75 percent.

The drop comes after six consecutive holds.

The key rate informs the cost of borrowing widely in Canada, an important factor for Canadians paying their mortgages and other loans.

"...at historic lows, Glen." https://t.co/cXSwMOE2JE pic.twitter.com/yaordMzvj5

— GK (@goodkarma4344) January 18, 2024

Homeowners with variable-rate mortgages and Canadians with debt tied to the central bank's policy rate will see interest rates drop by 25 basis points.

Bank of Canada Governor Tiff Macklem said in a statement on Wednesday that he believes the announcement will be "welcome news" to Canadians.

“We’ve come a long way in the fight against inflation,” he said. "And our confidence that inflation will continue to move closer to the 2 percent target has increased over recent months.”

Poilievre slams Trudeau for adding more to the national debt "than all previous prime ministers combined."

"We actually have the highest mortgage debt of any country in the G7," he says. https://t.co/vD78U4ZuZQ pic.twitter.com/NWTbZ8BwIs

— Rebel News (@RebelNewsOnline) May 1, 2024

Inflation was at 2.7 percent in April, down .2 from March. The first quarter of 2024 saw the economy grow by 1.7 percent, below the bank's forecast.

In April, employment saw an increase of 90,000, primarily fueled by part-time positions. Although employment growth hasn't matched the pace of the working-age population, it has helped bridge the gap between the number of workers and job openings, leading to a slight wage pressure to ease up.

Deputy PM Chrystia Freeland claims one of her "principal responsibilities" is to "not pour fuel on the flames of inflation." She adds that "inflation and high interest rates are really challenging for a lot of people, and that is one of the things I heard about today." pic.twitter.com/owbi5jXWJ0

— Rebel News (@RebelNewsOnline) March 8, 2023

Macklem did warn, however, that risks to the inflation forecast remain. He said that any decision regarding additional rate cuts will be taken on one meeting at a time.

“But if we lower our policy interest rate too quickly, we could jeopardize the progress we’ve made,” said Macklem. “Further progress in bringing down inflation is likely uneven and risks remain.”