04/16/2025
📣🏦🇨🇦The Bank of Canada has decided to hold the overnight lending rate (at 2.75% for the policy overnight rate). This is the first pause by the BOC since June 2024. Prime is now 4.95%.
🇨🇦⚖️🇺🇸Trumps Tariff’s have not only been implemented, but heightened trade tensions and tariffs imposed by the US will slow the pace of economic activity. Investors haven’t been this bearish in 30 years.
💸🏦💳 While economic growth has come in stronger than expected, the uncertainty created by continuously changing US tariffs is restraining consumers’ spending intentions, businesses’ plans to hire and invest and global travel to the US is down significantly. The US dollar index also down 10%.
💰📉🇨🇦 March inflation came in well below expected at 2.3%. Unemployment was up to 6.7% with 62,000 FT jobs lost in March.
🗳️🇨🇦The upcoming Canadian election is also thought to impact the BOC’s decision to pause as to not have it portrayed the GOV has any say in rate decisions.
Their next rate decision is due June 4, 2025.
💡This hold will keep variable rates slightly higher than current fixed, and we have already seen a massive uptick in clients choosing a variable over fixed since October’s rate cut. Lenders are however shrinking the discount they offer on Variable terms drastically, as they see the risk factor for them continue to increase the further the BOC continues to drop.
If you want to know more specifically how this great news may affect you personally, reach out, let’s chat! 💬
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