Bank of Canada Rate Announcement
Bank of Canada Rate Announcement
Date Posted: April 10, 2024
The Rate Increase
In a recent announcement, the Bank of Canada maintained the overnight rate at 5%, announcing no change to the current rate. The bank is also maintaining its policy of quantitative tightening.
The Bank's Governing Council decided to maintain the policy rate and continue normalizing the Bank's balance sheet. They are concerned about the persistence of inflationary pressures and want to see sustained easing in core inflation. They are also monitoring the balance between supply and demand in the economy, inflation expectations, wage growth, and corporate pricing behavior. The Bank is committed to ensuring price stability for Canadians.
What Does This Affect?
The Bank of Canada’s target overnight policy rate affects the interest you pay from lenders like banks. The higher the overnight rate, the more interest you’ll pay. The Bank of Canada maintaining the policy rate means that mortgage payments would stay the same as they were.
Getting Back on Track
The Bank expects the global economy to continue growing at a rate of about 3%, with inflation in most advanced economies easing gradually. The Bank has revised up its forecast for global GDP growth to 2¾% in 2024 and about 3% in 2025 and 2026. Inflation continues to slow across most advanced economies, although progress will likely be bumpy. Inflation rates are projected to reach central bank targets in 2025.
If you have questions about your own mortgage, and the best strategy for you, please contact your broker today.
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