Finally! On September 17th the Bank of Canada cut the Key Rate by a quarter percentage point to now sit at 2.5%. This comes after months of speculation that our Central Bank would wait until after the relaxing days of summer to start igniting business investment and consumer confidence. 

It’s great news for housing markets and business too. Thinking of a new place to call home? Mortgage rates are moving down which opens more options in today’s market. Renewing a mortgage? Better rates mean a better night’s sleep.

The rate cut will likely also boost business optimism as “cheaper money” makes it more compelling to expand operations, opening new employment opportunities. With lower interest rates boosting business and consumer confidence, the BoC is working toward a productivity increase and GDP growth to offset the impact of complicated trade relationships.

Are additional cuts on the horizon? The Bank of Canada will continue to look at the stability of inflation, having come in at 1.9% for August as announced by Stat Can on September 16th. Also, CREA on September 15th reported a 4 year high for home sales nationally in August.  The next rate announcement comes on October 29th.

South of the border, the U.S. Federal Reserve also delivered a .25% rate cut, on the 17th. The move comes as the Fed responds to signs of their cooling labour market, aiming to give their economy a boost – while still keeping an eye on inflation. With both central banks now moving in the same direction, policy alignment is likely to ease pressure on the loonie, as well as support further BoC rate cut conversations.

Every neighbourhood is different. If lower rates have you dreaming of a move, or if you just want to know “how much they’re asking?” or “how much did it sell for?” Call me. Let’s Connect.