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With the recent increase, latest forecasts suggest that it will take 1-2 years to get inflation back in order. As such, it's expected that there will be another rate hike on July 12, 2023.
What's next? It looks like more rate hikes will come and monetary policy will continue to tighten until such a time when the economy "breaks". Unfortunately, this cycle needs to happen for better long-term economic health.
Rates Up (Again)!
The Bank of Canada raised rates by 25 bps at today's meeting, which is a direct hit to mortgage holders and the housing market. Why the increase?
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Bank of Canada keeps key rate unchanged at 4.5%
The Bank of Canada is holding its benchmark interest rate steady at 4.5%, with the expectation that inflation will decrease in the coming months.
Here are some key takeaways:
Our thoughts: Today's move, or lack thereof, comes at the expense of the Canadian dollar and may prompt even more inflation leading to a higher chance of more rate hikes in the coming months.
Bank of Canada Give Borrowers a Break!
The Bank of Canada made no change to the overnight rate at today's meeting, which provides some much needed relief to variable rate borrowers.
The next meeting is in April and the BOC will be keeping a close eye on the labor market, inflation, and the US monetary policy (amongst other things) to determine its next move.
Bank of Canada Hikes Another 1/4 Point.
Here's what you need to know:
- the prime rate will likely push to a 20 yr high of 6.7% (which impacts variable mortgage payments)
- the expectation is to pause further rate hikes (albeit, conditionally)
- house prices will likely fall further (some forecasts suggest that 2023 could be the slowest year for sales since 2001)
- qualifying for a mortgage will become harder