Are you a homeowner or homebuyer who is juggling budgeting for your mortgage amidst an ever-changing economy? We have some news for you: The Bank of Canada has announced that it will hold its benchmark interest rate steady. This positive news could mean savings in your pocket and lower overhead expenses on housing if inflation. Assuming of course that as projected by the Bank, slows down this year. Read on to learn more about how this decision can affect you as a homeowner or prospective buyer.
The Latest Bank of Canada NEWS
The Bank of Canada held its breath, keeping interest rates at a steady 4.5 per cent, bracing for the impact of its previous hikes to settle. Economists were expecting this decision, after the bank’s announcement that it would take a break from raising rates. The bank had raised rates eight times between March 2022 and February of this year. Stemming from their aggressive campaign to increase rates after the pandemic’s early days, when they slashed the benchmark lending rates. With inflation soaring, Canada’s inflation rate reached its highest level in decades, peaking at over eight per cent in June 2022. This before cooling to just over five per cent by February 2023. Stay tuned for next week’s data on March where it is expected to show continued progress downward.
What’s Next for the Bank of Canada RATES?
The Bank of Canada has made the wise decision to hold off on any major policy changes. At least until further notice due to the cooling of inflation. The latest Monetary Policy Report predicts that the official inflation rate will dip to three per cent in the coming months. Eventually, it is expected to reach the bank’s target rate of two per cent next year. Governor Tiff Macklem acknowledged the relief that Canadians will experience, but also emphasized that their work is not done until price stability is fully restored. The destination is clear and the bank is determined to stay the course.
Have Rate Hikes worked to battle Inflation?
The bank’s top officials are keeping a close eye on inflation. They indicate they will not hesitate to increase rates again if necessary. However, it is confident that the current rate hikes have been effective in achieving the desired results. Deputy Governor Carolyn Rogers did note that the previous increases have already slowed down consumption and restored economic balance.