01/24/2024
The Bank of Canada has decided to maintain its policy interest rate for the fourth consecutive time, signaling a shift in monetary policy discussions. Instead of focusing on raising borrowing costs, the bank is now contemplating how long it should wait before considering rate cuts. This adjustment comes as the Canadian economy enters a phase of "excess supply."
In the much-anticipated decision, the bank has opted to keep its policy rate steady at 5%, maintaining the two-decade high set in July of last year.
The noteworthy change in language during Wednesday's announcement suggests a decreased likelihood of future rate hikes and introduces the possibility of rate cuts. Bank of Canada Governor Tiff Macklem emphasized this shift, stating, "With overall demand in the economy no longer running ahead of supply, Governing Council’s discussion of monetary policy is shifting from whether our policy rate is restrictive enough to restore price stability to how long it needs to stay at the current level." While not ruling out further hikes completely, Macklem hinted at their unlikelihood if inflation and economic activity align with the bank's projections.
If you want to know how this could affect your buying and selling decisions in the real estate market, contact us:
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Paula Lagos-Maramba | REALTOR®
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