The Bank of Canada has lowered its key interest rate to 4.75 per cent, marking the bank's first rate cut since March 2020.
“We’ve come a long way in the fight against inflation,” said Bank of Canada Governor Tiff Macklem in today’s press conference opening statement. “Our confidence that inflation will continue to move closer to the 2% target has increased over recent months. The considerable progress we’ve made to restore price stability is welcome news for Canadians.”
James Walker - Managing Broker of Prompton added "The announcement today from the BOC is a much-needed boost of confidence that the Vancouver real estate market has been in desperate need of. Vancouver real estate is one of the safest and most resilient markets in the world, it has faced pandemics and world-wide financial meltdowns. Recently though, uncertainty in the market has been fueled by unknown factors that include cost of living, inflation and building costs. A drop in interest rates, be it ever so soft, is a strong sign that there is light on the horizon.
Homeowners with variable-rate mortgages, as well as Canadians with other kinds of debt tied to the central bank’s policy rate, will immediately see their interest rates drop by 25 basis points.
Central bankers are signaling the end of their tightening cycle aimed at bringing inflation down to their two percent target. This move, albeit small, suggests a shift in strategy with more rate cuts potentially on the horizon. In April, inflation dipped to 2.7 percent from 2.9 percent in the previous month, reinforcing this adjustment in policy direction.
Comments