It’s no surprise that the BoC held their overnight rate at 5% today for the 4th consecutive time.
They did, however, suggest that monetary easing will begin by the middle of this year.
The Bank is forecasting inflation falling to 2.5% by the end of this year.
While some economists are predicting a recession, the Bank is suggesting a soft landing for the economy.
The Bank expects inflation to remain close to 3% during the first half of this year before gradually easing, returning to the 2% target in 2025.
The BoC wants to see further and sustained easing in core inflation.
The good news: Past interest rate hikes have resulted in lowering economic activity, balancing supply and demand and have lowered inflation.
The collateral damage is that the BOC’s rate-tightening cycle has weighed heavily on homeowner budgets across Canada. People are left waiting it out over the next few months to see if rates start dropping by mid-2024.
The silver lining though is that if you are renewing a mortgage in 2024, there are some excellent options currently available to you.
If your mortgage is renewing anytime between now and June, please reach out, it’s never too early to start exploring your options.
Keith Baker | kpbaker@shaw.ca | 604.723.5363
Jackie Zerbe | jacqueline@totalmortgage.ca | 604.724.6982