Real Estate Blog

The Bank of Canada has lowered its target for the overnight rate to 4.25%, with the Bank Rate at 4.5% and the deposit rate at 4.25%, continuing its approach to balance sheet normalization.

Globally, the economy grew by about 2.5% in the second quarter, matching the Bank's July Monetary Policy Report (MPR) projections. In the U.S., economic growth exceeded expectations, driven by consumer spending, though the labor market has cooled. The Euro area's growth, fueled by tourism and services, contrasts with weaker manufacturing. Inflation is gradually easing in both regions. Meanwhile, China's economy faced challenges from weak domestic demand. Global financial conditions have become more favorable since July, with bond yields declining. The Canadian dollar has seen a slight uptick, primarily due to a weaker U.S. dollar, and oil prices have dipped below July's MPR assumptions.

In Canada, the economy grew by 2.1% in the second quarter, boosted by government spending and business investment, slightly surpassing July’s forecast. However, early indicators suggest a slowdown in economic activity in June and July. The labor market has also slowed, with minimal employment changes recently, though wage growth remains high compared to productivity.

Inflation slowed to 2.5% in July as anticipated. The Bank's preferred core inflation measures averaged around 2.5%, with the share of CPI components rising above 3% in line with historical trends. High shelter prices continue to drive overall inflation but are beginning to slow, while inflation in some other services remains elevated.

With inflationary pressures easing, the Governing Council decided to cut the policy interest rate by 25 basis points. While excess supply in the economy is helping reduce inflation, rising shelter and service prices are exerting upward pressure. The Governing Council is carefully monitoring these opposing forces and will base future monetary policy decisions on incoming data and its impact on the inflation outlook. The Bank remains committed to restoring price stability for Canadians.

If you have any questions about how these changes might affect your home selling or buying this fall, call us! We're here to help: 905.335.4102 | info@roccasisters.ca