Bank of Canada Kept Key Interest Rate To 4.5%
Today the Bank of Canada launched their decision to keep the rates steady. This was widely expected as the Bank of Canada will want to continue to monitor the delayed effect of already completed hikes and see what decisions should be made down the road.
Bank of Canada Kept Key Interest Rate To 4.5%: Why Did the Bank of Canada Keep Rates the Same?
The Bank of Canada has not seen enough evidence that the inflation rate is lowering. Rate hikes normally take a minimum of 3 months to get a full effect on the economy, and the Bank of Canada will need to see more evidence before starting to lower the rates.
Bank of Canada Kept Key Interest Rate To 4.5%: Does this mean We Are Safe?
Unfortunately, with the way this economy has been in the past many months, it is not with 100% certainty what is to come. The uneasiness of a recession is still looming and it can still very much happen depending on what market impacts take place in the weeks and months to come.
Overall, many markets have been trading sideways for many months and it is anyways guess right now which direction it will go in the short term. Sideways training can be great for a certain period of time, but history shows that sideways trading is never here for good.
Bank of Canada Kept Key Interest Rate To 4.5%: Promising Signs?
The economy in Canada has been motoring and March brought a boost of 35,000 new jobs, once again beating economist forecasts.
Statistics Canada reported that 18,800 full-time jobs were created in March, along with 15,900 part-time positions. The census forecast was 7,500 for the month, blowing the charts by a significant amount.
The unemployment rate also stayed at 5% for the fourth straight month
Finding a job has still been very difficult for many depending on the sector and it is important not to get down on yourself. Most of these added jobs were in specific categories such as transportation and warehouse, business, building and support services, and finance and insurance.
Bank of Canada Kept Key Interest Rate To 4.5%: Is This Good?
This all sounds like great news, but it is important to understand it from an inflation standpoint.
These creations of jobs and unemployment rates are not directly related to getting inflation back on track and are actually not the signs the Bank of Canada wants to see. The Bank of Canada has warned that Canada’s low unemployment rate will need to rise before price pressures are fully tamed.
Bank of Canada Kept Key Interest Rate To 4.5%: What is Likely to Happen Moving Forward?
The opinions on where the Bank of Canada may go in the future is very dependent on many factors and variables. Policymakers and economists are divided on if rate hikes are more likely, but most are predicting that cuts won’t come till the end of this year at the earliest.
Conclusion
The Bank of Canada made a decision today to keep the rates steady. This means that a wait and see approach will continue for the foreseeable future.
We will always update you on Bank of Canada decisions and how they will impact you.
It is important to understand how this can affect you and the rates to expect in the near future. Spring has always been a popular time to look to move or enter the real estate market, and we are anticipating an increase compared to this winter.
We are always available for a call and would be happy to discuss your options and the rate impacts you can expect. We update our current rates daily on our website so that you can always see them up to date. To check them out, go here.
