The Bank of Canada is holding its key interest rate at 4.5%, marking the fourth consecutive meeting where policymakers have kept borrowing costs unchanged as inflation shows signs of cooling.
Governor Tiff Macklem announced the decision Wednesday, noting consumer price inflation has declined from a peak of 8.1% in June 2022 to 2.8% in February. ‘We are seeing clear evidence that higher interest rates are moderating spending,’ Macklem said.
The move was widely anticipated by markets. However, the Bank’s statement struck a more dovish tone than in January, removing language about readiness to raise rates further. That shift has analysts predicting rate cuts could begin as early as June.
Canadian households welcomed the pause. Since March 2022, variable-rate mortgage holders have seen monthly payments jump by hundreds or thousands of dollars.
‘Every month they don’t raise rates is a relief,’ said Jennifer Walsh, a Toronto homeowner whose payments have risen nearly $800 monthly.
The housing market is showing signs of stabilization. National home sales rose 4.8% in February, though prices remain 15% below early 2022 peaks.
Source: Bank of Canada, Reuters
