Mortgage Blog
Bank of Canada Rate Announcement - March 6, 2024
March 6, 2024 | Posted by: Ken Fadel
Today, the BoC maintained its target for the overnight at 5.0% (where it has stood since July 2023), noting it remains concerned about the risks of inflation, even as the Consumer Price Index (CPI) came in at 2.9% in January. It also reiterated its pledge to continue its policy of quantitative tightening.
Shelter-price inflation remains elevated and is the biggest contributor to the inflation numbers. The Canadian economy grew in the fourth quarter by 1% more than the BoC expected, “although the pace remained weak and below potential”. Employment continues to grow more slowly than the population, and there are now some signs that wage pressures may be easing.
Global economic growth slowed in the fourth quarter of 2023, while U.S. GDP growth also slowed but remained “surprisingly robust and broad-based,” with solid contributions from consumption and exports.
The BoC’s statement this month was relatively short and its forward-looking comments limited, other than noting that it expects inflation to “remain close to 3% during the first half of the year before gradually easing.” However, it noted that it is still concerned about risks to the outlook for inflation, particularly “the persistence in underlying inflation.” It noted that it wants to see “further and sustained easing” in core inflation as it remains resolute in its commitment to restoring price stability for Canadians.
The next BoC interests rate announcement is scheduled for April 10, 2024.