Today, March 6, 2024, the BoC held its target for the overnight rate at 5% and is continuing its policy of quantitative tightening.
The BoC has now maintained this rate of 5% since July 12, 2023.
Economic growth in Canada was rather muted in the 4th quarter with real GDP expanding by 1% fuelled by strong growth in exports.
What is the BoC focussed on? They want to see maximum employment and price stability.
The good news: There are now some signs that wage pressures may be easing as employment continues to grow more slowly than the population.
CPI inflation eased to 2.9% in January with shelter inflation costs remaining elevated and which make-up 30% of the CPI basket.
The BoC remains concerned about risks to the outlook for inflation and wants to see further and sustained easing in core inflation and remains focused on seeing more data that inflation is on course to reaching their target of 2% before lowering their overnight rate.
What if you are renewing a mortgage in 2024: The tightening rate cycle has led to higher rates and consumers may potentially face higher than expected renewal rates. Do not automatically renew your mortgage before talking to us so that we can work through your options, reduce your stress and advise you, accordingly. The best time to reach out is 6 months prior to maturity.
The next scheduled date for announcing the overnight rate target is April 10, 2024.
Keith Baker | kpbaker@shaw.ca | 604.723.5363
Jackie Zerbe | jacqueline@totalmortgage.ca | 604.724.6982