BCREA ECONOMICS NOW Bank of Canada Interest Rate Announcement - October 24, 2018 The Bank of Canada raised its target for the overnight rate by 25 basis points to 1.75 per cent this morning. In the statement accompanying the decision, the Bank noted that the Canadian economy is expected to average growth of 2 per cent over the second half of 2018 before slowing to 1.9 per cent next year. The renegotiation of NAFTA is expected to lower uncertainty and boost business investment and exports while households spending and the housing market are stabilizing after the implementation of the B20 mortgage stress test. Inflation is expected to remain close to 2 per cent over the Bank's two year projection horizon. The resolution of NAFTA negotiations earlier in the fall paved the way for the Bank of Canada to resume its rate tightening this morning. While inflation data came in slightly soft in September, the Canadian economy is still operating above its long-run trend which should keep inflation near the Bank's 2 per cent target. The Bank will meet one final time in 2018 at its December meeting, at which we expect policymakers will maintain the target rate at is current level before raising the target rate to 2 per cent in January 2019. As the target rate continues on its path higher, Canadian mortgage rates will continue to rise, ultimately resulting in a 6 per cent qualifying rate by the end of 2019. 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.
|
Archives
May 2022
Categories |