BCREA ECONOMICS NOW
The Bank of Canada left its target for the overnight rate unchanged at 1.75 per cent this morning. In the statement accompanying the decision, the Bank noted that the outlook for the Canadian economy is moderating due to falling oil prices and mandatory production cuts in Alberta and a slowdown in global demand due to US-China trade tensions. As a result, the Bank has trimmed its forecast for Canadian economic growth in 2019 from 2.1 per cent to 1.7 per cent. Total inflation is being dragged lower by falling gasoline prices, though core inflation remains near the Bank's 2 per cent target.
While the direction of future monetary policy remains tilted toward higher interest rates, our baseline forecast is for a single rate hike as the most likely outcome for 2019. With a housing market battered by the stress test and signs of slowing growth elsewhere in the economy, it will be difficult for the Bank to accelerate monetary tightening beyond a gradual pace. A less hawkish Bank of Canada, along with a steep fall in Canadian bond yields, should translate to mortgage rates flattening out or even moving slightly lower in 2019.
For more information, please contact:
Cameron Muir | Chief Economist | Direct: 604.742.2780 | Mobile: 778.229.1884 | Email: firstname.lastname@example.org
Brendon Ogmundson | Deputy Chief Economist | Direct: 604.742.2796 | Mobile: 604.505.6793 | Email: email@example.com
The British Columbia Real Estate Association (BCREA) is the professional association for about 23,000 REALTORS® in BC, focusing on provincial issues that impact real estate. Working with the province’s 11 real estate boards, BCREA provides continuing professional education, advocacy, economic research and standard forms to help REALTORS® provide value for their clients.
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