Bank of Canada follows up with a second rate cut

by Persa Real
July 31, 2024
blog, Business, Mortgage, Real Estate
0

Source & Credit: RBC Economic

Claire Fan
July 24, 2024

After a first interest rate cut in June, the Bank of Canada again lowered its key overnight rate by 25 basis points to 4.5%. The move was in line with market and our own expectations ahead of the announcement.
Governor Macklem’s opening statement for the press conference was more dovish than the rate announcement. The governor highlighted a reasonable expectation for future rate cuts should inflation continue to ease in line with BoC’s forecast. He also discussed the balance of risk to inflation, and highlighted an increase in weight to the downside.
On the downside, the BoC focused on the state of the Canadian economy, more specifically increased excess supply as indications that inflation pressures should continue to unwind.
Indeed, growth in the economy is expected to have decelerated again in the second quarter after slowing in Q1, leaving a bigger gap with potential GDP growth that’s still propped up by the rise in population. Although the BoC expects the government’s target on non-permanent residents should reduce population growth in 2025.

Full Article:

https://thoughtleadership.rbc.com/bank-of-canada-follows-up-with-a-second-rate-cut/

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