Market Update: Bank of Canada Raises Interest Rates Again

It is no secret what the Bank of Canada has been doing since March in an effort to curtail inflation. Today the bank of Canada has raised their overnight key rate for the sixth time, another 50 basis points, to bring the rate to 3.75%. This will continue to effect Windsor and the local real estate market as buyers and homwowners grapple with the increase.

The Bank continued with their projection of a potential recession for the first half of 2023 as well. Their report projected a “GDP growth is then projected to slow to between 0 percent and 0.5 per cent through the end of 2022 and the first half of 2023.”

Tiff Macklem, the Bank of Canada Governor, had this to say during the announcement. “What that means is that, yes, a couple, two, three quarters of slightly negative growth is just as likely as two or three quarters of slightly positive growth, that's not a severe contraction, but it is a significant slowing of the economy."

While the inflation rate has dropped slightly, it does sit at the still high rate of 6.9%, with the Bank seeing no impactful evidence of easing in the next term.

Macklem, also indicated there are more rate hikes to come. “This tightening phase will come to a close,” he said. “We're getting closer to that point, but we're not there yet. So we do expect interest rates will need to go up further and we will determine the pace based on developments going forward."

The Bank of Canada’s next scheduled rate announcement is set for December 7th.

(Photos, quotes, and article courtesy of Jordan Gowling, CTV News. https://www.ctvnews.ca/business/bank-of-canada-raises-rate-by-50-basis-points-predicts-potential-recession-in-the-first-half-of-2023-1.6125290)

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