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BCREA ECONOMICS NOW Bank of Canada Interest Rate Announcement - May 30, 2018 The Bank of Canada decided to leave the target for the overnight policy rate unchanged at 1.25 per cent this morning. In the statement accompanying the decision, the Bank noted that inflation has been close to its two per cent target and will likely be higher in the near term than was previously forecast due to higher gasoline prices. Economic growth in the first quarter was stronger than expected due to rising exports and business investment, which helped to offset a B20 induced softening in housing activity. Overall, the Bank's view is that higher interest rates will be warranted to keep inflation near its target. Although the Bank held steady today, with inflation rising to the Bank's two per cent target and the Canadian economy operating at or near capacity, interest rates are very likely headed higher, perhaps at the Bank's next meeting in July. That will translate to higher mortgage rates which, combined with the erosion of purchasing power from the mortgage stress test, will continue to temper housing demand in 2018. For inquiries regarding statistical and economics-related news releases, please contact:
Cameron Muir; Chief Economist, 604.742.2780, cmuir@bcrea.bc.ca Brendon Ogmundson; Economist, 604.742.2796, bogmundson@bcrea.bc.ca The Housing Market Update video webcast is produced monthly by the British Columbia Real Estate Association. Real estate boards, real estate associations and REALTORS® may reprint this content, provided that credit is given to BCREA by including the following statement: "Copyright British Columbia Real Estate Association. Reprinted with permission." BCREA makes no guarantees as to the accuracy or completeness of this information. Copyright© British Columbia Real Estate Association 1420 – 701 Georgia Street West PO Box 10123, Pacific Centre - Vancouver, BC V7Y 1C6 Phone 604.683.7702, Fax 604.683.8601 www.bcrea.bc.ca bcrea@bcrea.bc.ca Comments are closed.
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