It's officially three in a row. After 25 point rate cuts in both June and July, the Bank of Canada has cut their key rate an additional 25 points in today's announcement. Today's cut brings the Bank of Canada policy interest rate to 4.25%.
Tiff Macklem, the Governor of the Bank of Canada, laid out two key reasons for their third consecutive rate cut in his prepared statement this morning. "First, headline and core inflation have continued to ease as expected. Second, as inflation gets closer to target, we want to see economic growth pick up to absorb the slack in the economy so inflation returns sustainably to the 2% target." (Bank of Canada, 2024)
Looking into the future, could there be more rate cuts? Macklem remains confident there will be. "Inflation continues to reflect the push and pull of opposing forces. Overall weakness in the economy continues to pull inflation down. But price pressures in shelter and some other services are holding inflation up. Since the July Monetary Policy Report, the upward forces coming from prices for shelter and some other services have eased slightly. At the same time, the downward pressure coming from excess supply in the economy remains. If inflation continues to ease broadly in line with our July forecast, it is reasonable to expect further cuts in our policy rate. We will continue to assess the opposing forces on inflation, and take our monetary policy decisions one at a time." (Bank of Canada, 2024)
The Bank of Canada's next rate announcement is scheduled for October 23, 2024.
Graph Courtesy: Bank of Canada; https://www.bankofcanada.ca/core-functions/monetary-policy/key-interest-rate/
Quotes Courtesy: Bank of Canada; https://www.bankofcanada.ca/2024/09/opening-statement-2024-09-04/
Here at Jump Realty our agents will give you honest advice on what course of action is best for you in their professional opinion and will always put taking care of your best interests first! With offices in Windsor, Tecumseh, Kingsville, LaSalle, Harrow, Chatham, and Leamington, no matter where you are, a Jump agent is ready to help. Please contact us for any housing needs and let us give you a better real estate experience!
