Friday, July 19, 2024
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Reasons Why the Bank of Canada Will Not Cut Rates in 2024

Hello again and thanks for tuning in this week! Today, I want to talk about the current state of interest rates and real estate in Canada.

First off, let’s address the speculation that interest rates will be cut in June. In my opinion, this is unlikely to happen. The Bank of Canada typically makes interest rate decisions based on reactive measures to market conditions. While inflation is currently sitting at 2.7%, which is at the high end of the target range, it’s not enough to warrant an immediate rate cut.

There are several factors that the Bank of Canada considers before making any rate adjustments. Unemployment is on the rise, but not yet at concerning levels. The stock market is performing well, and mortgage defaults are still relatively low. House prices have peaked and are starting to stabilize.

One major concern is the high inflation rate of shelter costs, which is at 6.4%. This is a significant factor in the overall inflation rate and is impacting affordability for many Canadians.

Overall, while there are signs of a slowing economy, we are not yet in a recession. The Bank of Canada is likely to wait until inflation is sustainably back at 2% before considering any rate cuts.

In conclusion, while there is speculation about a potential rate cut in June, it is unlikely to happen based on current economic indicators. The Bank of Canada will continue to monitor market conditions and make decisions accordingly.

Thank you for watching and stay tuned for more updates on the Canadian economy. Let me know your thoughts in the comments below!

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