Bank of Canada Interest Rate Decision | January 24, 2024

Dated: January 24 2024

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The Bank of Canada once again held its key interest rate steady @ 5% Wednesday January 24, 2023.

This decision comes as no surprise to most analysts. Weaker ecomomic growth along with slowing inflation has allowed the central bank to hold its policy rate steady and monitor how the economy is responding to higher rates.

Now, The Bank of Canada is turning its attention to when it may be able to start cutting interest rates. Economists have been eagerly waiting for any sign from the bank on when it may pivot to rate cuts.

The central bank also made a point to say that inflation is too high, noting in a press release that the governing council is still concerned about the stubbornness of elevated inflation.

Canada's annual inflation rate ticked back up in December to 3.4 per cent as underlying price pressures remained high.

The central bank emphasized the role shelter costs were playing in propping up inflation, noting it is the biggest contributor.

The Bank of Canada has acknowledged that shelter costs are being driven in part by structural barriers to homebuilding as well as strong population growth.

Ahead of Wednesday's decision, forecasters were widely expecting weakness in the Canadian economy would prompt the central bank to begin cutting interest rates as early as this spring.

The Bank of Canada's latest forecasts released Wednesday suggest the economy will continue to be weak before rebounding in the second half of the year, while inflation is still expected to return to two per cent in 2025.

Its forecasts are mostly unchanged from October.

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Pat Pisanti

When you're looking for charismatic, professional, guaranteed and confidential service, look to Real Estate Sales Representative, Pat Pisanti. Pat Pisanti is a full-service real estate salesperson th....

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