The summary details discussions between Governor Tiff Macklem and his deputies ahead of the June 5 rate of interest announcement wherein the central bank cut its benchmark rate of interest.
“While they acknowledged the risk that progress could stall – as was the case in the United States – there was agreement that, after four consecutive months of falling core inflation and indicators pointing to a continued downward momentum, sufficient progress had been made to justify a first cut in the policy rate,” the summary said.
The Bank of Canada’s quarter-point rate cut was the primary time the central bank has cut its benchmark rate of interest since March 2020. It also marked a turning point in its Fighting high inflation.
What did experts predict?
In the run-up to the rate of interest decision, most forecasters assumed that the central bank would make its first rate of interest cut, but some expected it to occur in July.
Canada’s inflation rate reached 2.7% in April, while indicators of underlying price pressures also eased.
The key rate of interest is currently at 4.75 percent, which underlines the central bank’s cautious approach. It also points out that it desires to make future rate of interest decisions individually.
While a rate cut shouldn’t be expected to have a significant impact on the economy, it signals the start of an easing cycle for the Bank of Canada.
What do falling rates of interest mean for the true estate market?
The residential real estate market particularly is anticipated to get better in the approaching months after a big slowdown in activity.
