The Bank of Canada has maintained its overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. The bank is sticking to its policy of quantitative tightening.

Globally, economic growth is slowing, and inflation is easing. In the U.S., growth has been stronger than expected due to robust consumer spending, but it is expected to weaken in the coming months. The euro area has experienced weakened growth, coupled with lower energy prices, reducing inflationary pressures. 

In Canada, economic growth stalled in the middle of 2023, with real GDP contracting at a rate of 1.1% in the third quarter. Higher interest rates are restraining spending, and the labour market is easing. Although wages are still rising, the overall data suggests the economy is no longer in excess demand.

The economic slowdown is easing inflationary pressures in various goods and services prices. CPI inflation dropped to 3.1% in October, influenced by lower gasoline prices. However, shelter price inflation has increased due to faster growth in rent and housing costs.

With signs that monetary policy is moderating spending and alleviating price pressures, the Governing Council has decided to maintain the policy rate at 5% and continue normalizing the Bank's balance sheet. The Council remains concerned about risks to inflation outlook and is prepared to raise the policy rate further if necessary. The focus is on achieving further and sustained easing in core inflation while considering factors like demand and supply balance, inflation expectations, wage growth, and corporate pricing behavior. The Bank is committed to restoring price stability for Canadians.

The next announcement for the overnight rate target is scheduled for January 24, 2023, accompanied by the release of the Bank's full outlook for the economy and inflation in the Monetary Policy Report.

If you have any questions about these rates and how they might affect your buying or selling decisions, let us know and we can help fill in the blanks and provide invaluable insights into the market. Opportunities are plentiful for both Buyers and Sellers now and we’re always here to guide you and to Talk Real Estate! Contact us today! 

Cathy and Tanya Rocca

Contact us:  |  905.335.4102

Posted by Tanya Rocca on
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