The Canadian Press Bank of Canada expects to be able to start cutting interest rates 'later this year' , but members of its board of directors are divided as to exactly when this decline could begin. This is what we can learn on Wednesday in the summary of the deliberations of the board of directors of the central bank which led to the decision on the key rate made on March 6, i.e. to maintain it at 5, 0%. The summary said board members agreed that rate cuts could begin this year if the economy and inflation evolves in line with Bank of Canada projections. Even though members have agreed on the conditions that will need to be met to start lowering the policy rate – they want to see further and sustained easing of the set of indicators that the policy rate requires. they call underlying inflation – they remain divided on the question of when there will be sufficient evidence that these conditions will be met. Loading ELSEWHERE ON INFO: Yves Michaud, 1930-2024: the “Robin of the Banks” dies Loading ELSE ON INFO: Yves Michaud, 1930-2024: the “Robin of the Banks” dies out Members, however, differed on when there was likely to be sufficient evidence that these conditions were met, and on how to weight risks to the outlook. A quote from Excerpt from summary of deliberations of the Bank of Canada The Bank of Canada opted to keep its benchmark rate at 5.0% earlier this month and avoided commenting on when it will begin lowering it. Its governor, Tiff Macklem, explained that the central bank wants to avoid acting too quickly, so as not to have to reverse course later. On Wednesday, the US Federal Reserve also announced that it was keeping its key interest rate unchanged for a fifth consecutive meeting. U.S. central bank officials said they still planned to cut the benchmark rate three times in 2024, despite signs that inflation remained surprisingly high at the start of the year, but they expect fewer rate cuts in 2025 and have slightly raised their inflation forecasts. In Canada, the rate of ;inflation came in below expectations for a second consecutive month, reaching 2.8% in February. This latest inflation data has reinforced economists' expectations that the Bank of Canada will begin lowering its key rate around mid-year.
The inflation rate was lower than expected for a second consecutive month in Canada, reaching 2.8 % in February.Yves Michaud, 1930-2024: the “Robin of the Banks” turns off
Yves Michaud, 1930-2024: the “Robin of the Banks” dies out
Only 1.5% of Canadian homes were unoccupied in 2023.
If the housing sector were to rebound in the spring, the rise in housing costs could increase, which would delay the return of measured inflation by the consumer price index to the target of 2%. And if high inflation turns out to be more persistent than expected, monetary policy would probably have to remain restrictive for longer, we can read in the summary.
In February, housing costs were 6.5% higher than a year ago. Mortgage interest costs and rents were the two main contributors to inflation.
The next announcement from the Bank of Canada on interest rates is scheduled for April 10.
With information from the 'Associated Press