Interest Rates: Bank Of Canada Unchanged

As I’m sure you’ve heard, the Bank of Canada recently held its latest interest rate meeting, and I’m pleased to inform you that they have decided to keep interest rates steady at 5%.

The Bank is keeping a watchful eye on the following key pieces of data:

• Unemployment Report: The rate of employment and job market conditions.
• CPI Report (Consumer Price Index): Tracking inflation to ensure it remains within a target range.
• Quarterly GDP Statements: The overall economic health and performance of the country.

Even though the Bank of Canada held interest rates steady, the bond market is still pricing in one more rate increase this year. This is why we haven’t seen any noticeable decreases in fixed rates like we had in January 2023.

What Are The Big 6 Banks Predicting?

Notice in the picture many of the Banks are predicting the Bank of Canada to start decreasing interest rates in Q2 of next year.

When there is so much as a hint from the Bank of Canada that rates will decrease, you can expect the Bond Market to react quickly, ultimately causing many fixed-rate mortgage specials.

Based on these predictions, 2024 looks like a busy year!!

Personal Opinion

Over the last 2-years we’ve learned predictions from economist are never a sure thing, and interest rates can swing more than expected.

It certainly seems like we are nearing the top of our rate cycle as the recent jobs report and GDP report was less favorable than expected. However, due to the base effect on how CPI is calculated, it is likely we will see overall inflation increasing until the January report is released in February 2024.

It is also worth noting, even with interest rates at 15-year highs the Vancouver Real Estate Market is extremely resilient. If this is a sign of what is to come, we can expect the Vancouver Market to heat up quickly once we see any sign the Bank of Canada will begin lowering the interest rate.

If you have any financing questions or scenarios you would like to discuss, please contact me directly at 778-215-4121.

Thank you,

Adam Sale

778-215-4121