Market Update: Bank of Canada Increases Rates Once More
Following 2022 trends of rate hikes, the Bank of Canada has started 2023 with yet another. They announced on Wednesday that their key interest rate will increase by another 25 basis points. This brings the key rate in the country to 4.5%, the highest it has been since 2007.
The eighth consecutive rate increase was expected by economists. The key rate has now increased 4.25% in the past year in an effort to calm and reduce inflation across Canada.
For those interested in jumping into the Windsor real estate market, those already with a mortgage, and those thinking about looking for homes for sale in Windsor in the near future, there is a silver lining in today's announcement from the country's top bank.
With inflation cooling from 8.1% in the middle of 2022 to 6.3% this past December, the Bank of Canada is ready to pause rate increases to assess the impact of what has been done so far. Bank of Canada Governor Tiff Macklem told reporters this after the announcement on Wednesday,
“We’ve raised rates rapidly, and now it’s time to pause and assess whether monetary policy is sufficiently restrictive to bring inflation back to its two per cent target.”
He did add however that this hold is “conditional”. It will depend on whether the economy continues to develop according to its forecast. He stressed that additional hikes could be possible to get inflation back down to the Bank’s goal of 2%.
Asked about potential cutbacks to the key rate, Macklem simply stated that it is far too early to discuss rate cuts.
Quotes and content courtesy Craig Lord, Global News; https://globalnews.ca/news/9434819/bank-of-canada-interest-rate-jan-2023/
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