Bank of Canada Keeps 2% Inflation Target Through 2031

The Bank of Canada and the federal government renewed Canada's monetary policy framework on Thursday with the inflation target unchanged at 2%, the midpoint of a 1% to 3% control range, a joint statement said.

The agreement runs another five years, through Dec. 31, 2031, and takes effect Jan. 1. Policy will stay symmetric, with equal weight on misses above and below the target, and the bank keeps flexibility to respond to shocks while aiming to return inflation to 2% over time. Reuters reported the same terms and said Governor Tiff Macklem will speak more about the renewed framework on Nov. 24.

How the target reaches crypto

An inflation target is the rate a central bank aims for when it sets interest rates. When Canada holds the 2% anchor, markets read it as continuity: no shift toward a higher tolerance for price growth that might change rate-cut odds. Higher policy rates and a firmer Canadian dollar can tighten financial conditions for bitcoin and other speculative holdings; the reverse is true when cuts arrive. The renewal itself does not change the policy rate.

Canada's framework has used a 2% midpoint for more than three decades. The joint statement said the bank acted forcefully in the recent high-inflation period and that inflation returned to the 2% target and the 1%–3% range. The bank raised its policy rate by 25 basis points to 2.5% on Oct. 28, its first hike in three years, according to the bank's earlier decision materials referenced in Canadian press coverage of Thursday's budget-day announcements.

Bitcoin traded near $75,690 around midnight ET Friday, down about 6.0% over 24 hours, per CoinGecko, on a session dominated by U.S. equity weakness.

Macklem's speech on the renewed framework is scheduled for Nov. 24. The policy rate sits at 2.5% after the Oct. 28 hike.