Bank of Canada reveals final rate decision of 2023
The Bank of Canada has left its policy interest rate unchanged in its last scheduled decision of 2023, keeping rates where they are for a third consecutive announcement amidst evidence that previous hikes are proving effective in cooling the economy. The central bank kept its benchmark rate, which leads variable mortgage rates in Canada, at its existing level of 5.0% in Wednesday’s decision, meaning the current pause on rate increases is the longest since the Bank began hiking rates in March 2022. In its statement accompanying Wednesday’s decision, the central bank maintained a hawkish tone, indicating its governing council was …
Canada’s inflation rate drops again
Canada’s inflation rate fell to 3.1% in October, still above the Bank of Canada’s target rate but down notably from its September reading of 3.8%. That slowdown was caused mainly by plummeting gas prices, with the cost of fuel at the pump falling by 7.8% compared with the same time last year. When gas price fluctuations were taken out of the equation, the consumer price index (CPI) grew by 3.6% last month, Statistics Canada said, down slightly from 3.7% in September. Unsurprisingly, skyrocketing mortgage interest and rent costs continue to contribute strongly to year-over-year price growth, while grocery prices also …
Bank of Canada reveals October rate decision
The central bank has made its second-to-last scheduled rate announcement of the year The Bank of Canada has left its policy interest rate unchanged in its latest decision, opting not to raise rates further amid signs that the national economy is beginning to slow. The central bank announced this morning that it was holding that trendsetting interest rate steady at 5.0%, the second time in a row it has kept rates where they are as inflation continues to moderate and economic growth remains largely flat. In its statement accompanying the decision, the Bank said it was prepared to raise …
High Rates Impacting Market, but Population Growth Will Soon Spur Demand
While high interest rates are affecting the market, the upcoming population growth is expected to stimulate demand for housing. Explore TRREB’s most recent Market Watch Report for the latest market statistics and more! https://www.trrebwire.ca/index.php/2023/10/04/high-rates-impacting-market-but-population-growth-will-soon-spur-demand/ …
Canada housing market slowdown likely to last for a prolonged period – analyst
The Bank of Canada’s rate hikes played a major role in the market’s significant deceleration Taking the Canadian economy’s likely trajectory into account, the housing market’s sluggishness will almost certainly persist for the foreseeable future, according to Dawn Desjardins, chief economist at Deloitte Canada. “I think we’re seeing the impact of higher interest rates on the economy, especially during the second quarter,” Desjardins said in an interview with the Financial Post. “We did see a decline in GDP output – a very small decline, but nonetheless, much leaner than what we saw in the first quarter of the year.” Desjardins …
Canadian economy remains largely flat in August
Marginal growth reduces prospect of further rate hikes The national economy posted growth of just 0.1% in August despite rebounding slightly, a sluggish performance that strengthens the case for the Bank of Canada to maintain its pause on interest rate hikes. The latest gross domestic product (GDP) figures, released by Statistics Canada on Friday, showed little change from a flat reading the previous month in a sign that the economy continues to soften largely in line with central bank expectations. The wholesale and finance sectors registered stronger performances on a monthly basis in August, although that was offset in …
Bank of Canada announces new rate hike
The Bank of Canada has announced a 25-basis-point rise in its benchmark interest rate, resuming its rate-hiking strategy after pausing in the previous two announcements. This increase brings the trendsetting rate to 4.75% and comes in response to recent data suggesting that the economy is still performing above the Bank’s desired level. According to the Bank’s statement, the current monetary policy is considered “insufficiently restrictive” to restore the balance between supply and demand and bring inflation back to the targeted 2%. The Bank acknowledges concerns about the possibility of inflation persistently exceeding the target level while maintaining its expectation that …
Canada’s economy outperforms in first quarter, raising pressure on Bank of Canada ahead of next week’s rate decision
The first quarter saw the Canadian economy expand by 3.1 percent on an annualized basis, surpassing predictions and increasing the pressure on the Bank of Canada to consider another interest rate hike, potentially as early as next week. Following a stagnant fourth quarter in 2022, the economy experienced a revival in the initial months of this year, thanks to strong exports and resilient consumer spending. This positive momentum appears to have carried over into April, as per a preliminary estimate by Statistics Canada, which indicates robust growth in that month, despite the adverse effects of the federal government workers’ strike. …
How to take advantage of the new tax-free first home savings account
April 1, 2023 marked the official launch date of the tax-free first home savings account (FHSA), Canada’s newest registered savings plan. As financial institutions start offering these in the weeks and months ahead, here are five things you need to know to take full advantage of these new plans. Tax-free in; tax-free out The 2023 federal budget description of “tax-free in; tax-free out” succinctly summarizes the attractiveness of the FHSA, which gives prospective first-time homebuyers the ability to contribute up to $40,000 and save on a tax-free basis towards the purchase of a first home in Canada. The …
Loans grow for 20% of Canadian bank’s mortgage holders due to high interest rates
In a recent update to its shareholders, CIBC provided a glimpse of how a growing proportion of Canadian mortgage holders are overburdened by the impact of the escalation in the Bank of Canada’s interest rates. CIBC has indicated that mortgage holders holding a combined value of $52 billion worth of the bank’s mortgages have monthly mortgage payments that currently do not cover the interest portion of their loans. The proportion of mortgage holders in such a predicament is about 20% of CBC’s total mortgage portfolio worth $263 billion. The bank states that this segment “relates to mortgages in which all …
