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The Bank of Canada today held its target for the overnight rate at 5%
On January 24th, the Bank of Canada once again held its overnight rate at 5.00% for the 4th consecutive meeting (the last increase was July 2023).
We’re cautiously optimistic that the next move will be downward as inflation begins to ease across the economy. The Bank of Canada stated: “The Bank expects inflation to remain close to 3% during the first half of this year before gradually easing, returning to the 2% target in 2025”.
While the Bank “is still concerned about risks to the outlook for inflation”, their explicit statement from December that the Bank “remains prepared to raise the policy rate further if needed” was not included in this announcement. This potentially signals a shift from whether interest rates are high enough, to how long until they can begin to be lowered.
The next Bank of Canada meeting is on March 6th, 2024.
Are you looking to make a purchase in the next 30 to 90 days? Over the past three months, bond yields have fallen dramatically in anticipation that the Bank of Canada may be done raising rates. The impact? Fixed mortgage rates have also fallen. If you are interested in discussing your options, please reach out to an Outline mortgage broker today.