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📰 Bank of Canada Holds Rate – Here’s What It Means for You
April 17, 2025
After seven consecutive rate cuts, the Bank of Canada decided to hold its key interest rate — and many are asking why.
The short answer? Uncertainty. While inflation continues to cool and the economic outlook looks increasingly bleak, the Bank has its reasons for hitting pause — and they’ve made it clear they’re more worried about long-term inflation than a short-term slowdown.
Let’s break it down.
Why Did They Hold the Rate?
Even though we’ve seen falling inflation numbers and signs of slower economic growth, the Bank is staying cautious. Here’s why:
1. Rate Cuts Take Time
The impact of previous cuts isn’t instant. The Bank of Canada has said that stimulus from those earlier moves can take 12 to 24 months to fully work through the economy. That means we haven’t yet seen the full effects of those rate reductions — and they don’t want to overdo it too soon.
2. Inflation Pressures Haven’t Disappeared
While inflation has eased, global supply chain issues and new tariffs are putting upward pressure on prices again. These disruptions make goods more expensive — which is exactly what the Bank wants to avoid.
3. They’re Focused on Stability Over Speed
Put simply: They’d rather be late to stimulate than risk doing too much too soon. In their view, overstimulating could undo the progress they’ve made on inflation. They’re aiming for balance — and for now, that means waiting.
What’s Next?
Markets are still pricing in two more rate cuts in 2025, with the next one most likely coming in July. But as we all know, things can change — fast. Between global events, shifting data, and market sentiment, this is a moving target.
Bank of Canada Update: What You Need to Know After the March 20 Speech
March 22, 2025
On March 20th, the Governor of the Bank of Canada delivered a speech that gave us a clearer picture of what’s on the horizon for the Canadian economy—and what it could mean for interest rates and mortgages.
If you don’t have an hour to watch the whole thing, here’s a quick and easy summary of the key takeaways.
The Big Picture: A Strong Finish, A Shaky Start
We wrapped up last year in a pretty good place. Inflation was easing, interest rates had started to come down, and the economy was showing signs of healthy growth.
But now, we’re facing a new challenge: U.S. tariffs on Canadian exports.
These new tariffs are already impacting major sectors, and they’re creating serious uncertainty about what comes next.
Which Canadian Sectors Are at Risk?
Here’s a breakdown of who could feel the impact the most:
- Oil sector (Alberta): New tariffs on oil could lead to reduced revenues and slower investment.
- Farmers (Prairies): Products like canola are now facing higher trade barriers, increasing costs and limiting market access.
- Manufacturing (Ontario and Quebec): Tariffs on steel and aluminum could slow down production and growth in these key sectors.
What makes it worse is the unpredictability. The U.S. keeps adjusting its stance, which makes it hard for Canadian businesses—and policymakers—to plan ahead.
The Bank of Canada’s Role
The Bank’s main focus remains the same: Keep inflation under control without adding more pressure on households and businesses.
The Governor mentioned that they are listening closely to feedback from Canadians and will continue adjusting their approach with care.
In simple terms: They’re paying attention, but they don’t have a crystal ball either.
What About Interest Rates?
This part’s important—especially if you have a mortgage.
🔹 Variable Rates: Right now, the Bank is expected to hold rates steady at its next announcement on April 16th. But if inflation starts to rise again, they’ve made it clear they won’t hesitate to raise rates to keep it in check.
🔹 Fixed Rates: Here’s some good news: we’ve seen some small fixed-rate decreases over the past week. That’s encouraging for anyone looking to buy, renew, or refinance.
Another interesting factor: The removal of the federal carbon tax from consumer prices could reduce inflation by about 0.5%, which might ease pressure on the Bank to hike rates.
What Should You Do Now?
If you’re a homeowner or planning to become one, here are a few tips:
- If you have a variable-rate mortgage, keep an eye on inflation and upcoming Bank of Canada updates.
- If you're shopping for a fixed-rate mortgage, you might be able to take advantage of lower rates right now.
- If you’re unsure how this impacts your situation, reach out—I’m happy to help you understand your options.
Final Thoughts
The economic outlook is a bit foggy right now, especially with trade tensions and unpredictable policies south of the border. But the Bank of Canada is proceeding cautiously, and we’re here to help you do the same.
If you want to talk through how these changes might impact your mortgage or buying plans, feel free to contact me directly. It’s always better to plan ahead than react later.
Tariff Fatigue and the Likely Bank of Canada Rate Cut
March 07, 2025
Hey everyone,
I don’t know about you, but I have major tariff fatigue. The constant back-and-forth has made it exhausting to keep up with market movements.
This week, bond yields dropped following the implementation of tariffs on Tuesday. Then, when the news broke that the tariffs were off again, we saw a slight rally. However, the overall uncertainty has kept both the Canadian and U.S. markets trending low.
Adding to the economic picture, Canada’s latest unemployment figures were released this morning. The rate remains unchanged from the previous month at 6.6%. While this isn’t a dramatic shift, it does contribute to the broader uncertainty affecting the economy.
What Does This Mean for Interest Rates?
The combination of tariff instability and stagnant unemployment numbers has increased the probability of a Bank of Canada rate cut to 80%.
With the next Bank of Canada meeting scheduled for March 12th, all signs point to a 0.25% decrease in the overnight rate. If that happens, we can expect some movement in mortgage rates and borrowing costs.
What Should You Do?
If you’re in the market for a mortgage or thinking about refinancing, now is a great time to review your options. A potential rate cut could mean lower payments, but it’s important to stay informed and act when the time is right.
As always, if you have any questions about how this might affect your mortgage, feel free to reach out!
Tips to navigate rates and economic uncertainty
February 06, 2025
With tariffs on the horizon, no one really knows how this is going to play out, so if you must choose a mortgage now, here are some tips to help navigate that uncertainty.
1)If you are risk tolerant, variables are the more flexible option, giving you a wait and see product because of the ability to lock into a fixed rate if desired. You can choose a fixed payment variable, that keeps you in control of the payment.
2)As we brace for economic turbulence, anyone who may need more liquidity should consider adding a secured line of credit in behind the mortgage
3)For those who want to maximize cash flow, look at extending your amortization, you can always bring the amortization back down later by increasing your payments or making lump sums on the mortgage
4)Always consider the intent of the property, and how long you may hold the property when looking at term length
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