Bank of Canada Leaves Rate Unchanged

In a move closely watched by homeowners and prospective buyers in Calgary, the Bank of Canada has made a significant announcement regarding its key interest rate. This decision, which aligns with current economic trends and expert predictions, is set to impact the mortgage rates across the country, including in Calgary.

Bank of Canada’s Decision: The Bank of Canada recently held its target for the overnight rate steady at 5%, continuing its policy of quantitative tightening​​. This decision comes amidst signs of a slowing global economy and easing inflation, both of which play a crucial role in the Bank’s monetary policy decisions​​.

Economic Context: Canada’s economic growth has experienced a stall, with real GDP contracting by 1.1% in the third quarter of 2023, following a growth of 1.4% in the second quarter​​. These figures reflect the impact of higher interest rates on consumer spending and business investment, and a softening in inflationary pressures, with CPI inflation dropping to 3.1% in October​​.

Implications for Mortgage Rates: With the Bank of Canada’s rate hold and the downward trend in the 5-year Government of Canada bond yields, mortgage rates have been adjusting. Lenders across the country, including those in Calgary, have been reducing fixed mortgage rates, with some now offering rates under 5% for the first time since spring​​.

Expert Predictions: Economists predict that the Bank of Canada will likely maintain this rate for at least the next six months, with a majority expecting a reduction in the second quarter of 2024​​. This forecast aligns with the broader economic indicators, including the impact of upcoming mortgage renewals and the risk of recession​​.

Conclusion: The Bank of Canada’s latest announcement is a reflection of the complex economic landscape facing Canada, and by extension, Calgary. As we navigate these changes, understanding the impact on mortgage rates and the housing market becomes vital. For Calgary residents, these developments offer both challenges and opportunities, making informed financial decision-making more crucial than ever.

For detailed analysis and personalized mortgage advice in light of these changes, visit Stay informed and prepared as we journey through this dynamic economic environment together.