As widely expected, the Bank of Canada announced today that they will maintain the key interest rate at 5.00%.
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A majority of economists believe stubborn inflation is likely responsible for the delay of the first Bank of Canada’s rate cut.
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Interest rates are working to moderate spending and inflation is easing gradually, though underlying pressures are proving persistent. The Bank projects that inflation will stay around 3% through the first half of 2024, returning to target in 2025.
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Global economic growth continues to slow, with inflation easing gradually across most economies.
What to Expect?
Earlier, rate cuts were anticipated as soon as the Bank of Canada's March or April monetary policy decision meetings, reflecting concerns about sluggish economic growth and a consistent decline in inflation. However, the landscape has shifted with both headline and core inflation measures showing an increase in December of 2023.
As a result of this positive inflation data, expectations for rate cuts have been pushed further into the year. According to a Reuters poll involving 34 economists, a significant majority—22 out of 34—now anticipate that the Bank of Canada's initial rate cut will likely occur in June or later.
Upcoming Bank of Canada Announcements:
March 6th
April 10th
June 5th
July 24th
Sept 4th
Oct 23rd
Dec 11th
Information courtesy of Darcy Doyle -The Mortage Professionals: https://themortgageprofessionals.ca/about-darcy-doyle/