Mortgage Blog
Bank of Canada Rate Announcement - September 4, 2024
September 4, 2024 | Posted by: Ken Fadel
The BoC lowered its key interest rate another 25 bps points to 4.25%. This marked the third straight decrease as was inline with market expectations.
The BoC reiterated that it is “reasonable to expect further cuts” if a weakening economy continues to place downward pressure on inflation.
Slack remains in the Canadian economy as 2024 Q2 GDP growth of 2.1% fell short of potential GDP growth (estimated by the BoC at 2.4% for 2024) as our surging population boosts the available labour supply. Meantime, hiring demand in Canada has slowed and struggled to keep up with rising labour supply.
The third straight interest rate cut in September from the BoC still leaves the overnight rate at relatively high levels when compared to a softening economic growth backdrop that's expected to keep inflation on a downward trajectory. Already, growth in the third quarter is looking to fall below the BoC’s latest forecast of 2.8%. It is expected that the BoC will follow with another cut when it makes its next announcement on October 23rd.