OTTAWA \u2014 The Bank of Canada\u2019s governing council thought about waiting until July to lower interest rates but ultimately decided to cut earlier, the central bank\u2019s summary of deliberations reveals.\u00a0<\/p>\n
The summary details the discussions between governor Tiff Macklem and his deputies in the lead-up to the June 5 rate announcement at which the central bank lowered its key rate.<\/p>\n
\u201cWhile they recognized the risk that progress could stall \u2014 as it had in the United States \u2014 there was consensus that with four consecutive months of easing in core inflation and indicators suggesting continued downward momentum, there had been sufficient progress to warrant a first cut in the policy rate,\u201d the summary says.<\/p>\n
The Bank of Canada\u2019s quarter-point rate cut was the first time the central bank lowered its policy rate since March 2020. It also marked a turning point in its fight against high inflation.<\/p>\n
Ahead of the rate decision, most forecasters were expecting the central bank would deliver its first cut, though some were holding out for July.<\/p>\n
Canada\u2019s inflation rate reached 2.7 per cent in April, while measures of underlying price pressures eased as well.\u00a0<\/p>\n
With its key rate now standing at 4.75 per cent, the summary reiterates the central bank\u2019s cautious approach, noting it plans to take future interest rate decisions one at a time.<\/p>\n
While one interest rate cut isn\u2019t expected to have a major affect on the economy, it signals the start of an easing cycle for the Bank of Canada.<\/p>\n
The housing market in particular is expected to pick back up in the coming months after a marked slowdown in activity.\u00a0<\/p>\n
Economists will have their eyes on just how much the housing market heats up as interest rates continue to fall.\u00a0<\/p>\n
The Bank of Canada will have two more inflation reports to consider before its next interest rate decision scheduled for July 24.<\/p>\n
The summary of deliberations details some of the risks discussed among the governing council, including a larger-than-expected economic pullback as a result of households renewing their mortgages at higher rates.<\/p>\n
On the flip side, the central bank considered the risk that rate cuts could reignite the housing market.\u00a0<\/p>\n
The summary says the governing council is also paying attention to how population growth will continue to affect the economy and inflation.<\/p>\n
\u201cThe timing and impact of government plans to unwind the rapid growth in non-permanent residents could affect the forecast for inflation and growth,\u201d the summary says.\u00a0<\/p>\n
The federal government is planning on curbing the share of temporary residents in the country to five per cent of the total population.<\/p>\n
According to Statistics Canada, temporary residents represented 6.8 per cent of the population as of April 1.\u00a0<\/p>\n
\u00a92024 The Canadian Press<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" OTTAWA \u2014 The Bank of Canada\u2019s governing council thought about waiting until July to lower interest rates but ultimately decided to cut earlier, the central bank\u2019s summary of deliberations reveals.\u00a0 The summary details the discussions between governor Tiff Macklem and his deputies in the lead-up to the June 5 rate announcement at which the central […]<\/p>\n","protected":false},"author":20838,"featured_media":321776,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_expiration-date-status":"saved","_expiration-date":1750507380,"_expiration-date-type":"delete","_expiration-date-categories":[],"_expiration-date-options":{"expireType":"delete","id":368300}},"categories":[7],"tags":[4767,1191,3877,26200,1221],"acf":[],"yoast_head":"\n