Real Estate Update- next key interest rate decision June 5, 2024

(May 22, 2024 )

The Bank of Canada's next key interest rate decision will be June 5, 2024, with everything 'trending in the right direction' when it comes to inflation 

The annual rate of inflation slowed in April to finish at 2.7%, with the cooling grocery prices  at 1.4%, down from 1.9% in March and offsetting higher fuel prices, with consumers paying 7.9% more in April.

Shelter Costs remain "red hot" with rising costs for rent and homeowners renewing their mortgages continuing to put upward pressure on shelter inflation. "It really is a story now of largely one or two sectors that are driving a big part of what we're seeing in terms of the headline (inflation number)", said Randall Bartlett, senior director of Canadian economics at Desjardins.

The April inflation report means "the door is open" for a rate cut, "but remains a close call", says Doug Porter, BMO chief economist. 

Whether the Bank of Canada rate cut comes in June, July or after, Bartlett said he doesn't expect the pace of easing to be as rapid as the tightening that saw a jump of 4.75 percentage points in the policy rate over two years, with any further cuts fluctuating between a rate hold or a small decrease of 25 basis points.

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