Mortgage Blog
Bank of Canada Rate Announcement - October 30, 2019
January 20, 2021 | Posted by: Ken Fadel
The BoC left its benchmark interest rate unchanged at 1.75% today as job creation has picked up and inflation remains in line with set targets. However, looming trade wars could force a cutting hand in the future.
Despite 'solid income growth' and a rebound in housing fueled by lower mortgage rates, the BoC cut their growth outlooks for both the global and national economies. Canada's GDP is only expected to grow by 1.6% next year, which is a sharp reduction from the 2.0% previously forecast. As a result, an interest rate cut either in December or early 2020 is expected by most economists. Over 30 central banks around the globe eased their policy over the summer and it's believed to be only a matter of time before the BoC follows suit.
Having said that, a rate cut is not guaranteed. The BoC remains wary of growing household debt and will be keeping an eye on the impacts of newly proposed government spending before committing to any reductions.
The next interest rate announcement is scheduled for December 4th.