“Babe, wake up, Tiff Macklem is dropping the rate decision today…,” if this isn’t how your partner woke you up this morning, let us get you up to speed.
Driving the news: The Bank of Canada is widely expected to hold interest rates steady today for the fifth consecutive rate announcement. This is even as the inflation rate dropped to 2.9%, far from its 8.1% peak in 2022 and within the bank’s target range of 1% to 3%.
- This year marks the second time inflation has fallen below 3% since the spring of 2021, but most analysts still don’t expect the BoC to lower interest rates until June.
Why it matters: With inflation in the BoC’s target range and the economy growing slower than the sun-deprived plant on your windowsill, the stage is set for a rate cut soon, and with it, a little relief for Canadians who have been struggling with high borrowing costs.
- Last quarter, high interest costs hit homeowners renewing their mortgages, with the number of people missing mortgage payments up 135% in Ontario and 62% in B.C.
Yes, but: Macklem said that cutting rates — when it happens — won’t do much to ease high rent inflation, one of the primary factors driving up the cost of living for Canadians.—LA