{"id":24618,"date":"2024-09-24T15:15:26","date_gmt":"2024-09-24T22:15:26","guid":{"rendered":"https:\/\/www.roryc.ca\/blog\/?p=24618"},"modified":"2024-09-23T09:57:43","modified_gmt":"2024-09-23T16:57:43","slug":"bank-of-canada-will-push-for-more-aggressive-rate-cuts-in-less-than-5-months","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2024\/09\/bank-of-canada-will-push-for-more-aggressive-rate-cuts-in-less-than-5-months\/","title":{"rendered":"Bank of Canada will Push for More Aggressive Rate Cuts in Less Than 5-Months"},"content":{"rendered":"<p style=\"text-align: justify;\">CIBC predicts the Bank of Canada (BoC) will push for more aggressive rate cuts, and Canadians could see a significant drop as soon as December.<\/p>\n<p style=\"text-align: justify;\">In June, the Bank dropped the interest rate from a longstanding 5% to 4.75%. That move was the first in more than four years, following six rate holds. Another quarter-point cut followed in July, bringing the rate to 4.5%. Then, in September, the BoC cut the key interest rate to 4.25%.<\/p>\n<p style=\"text-align: justify;\">CIBC economists and other industry experts expect a quarter-point cut in October.<\/p>\n<p style=\"text-align: justify;\">In its Economics Forecast report published on September 12, CIBC predicts that something more aggressive will occur within less than five months \u2014 two half-point cuts in December and January.<\/p>\n<p style=\"text-align: justify;\">This means we could potentially see the rate drop to 3% in January.<\/p>\n<p style=\"text-align: justify;\">\u201cThat\u2019s in contrast to a prior forecast that had rates easing at 25 basis points at a time, and we no longer expect any pauses on the path to less restrictive rates,\u201d CIBC economist Avery Shenfeld said in the report.<\/p>\n<p style=\"text-align: justify;\">CIBC noted that as inflation is cooling in the US and Canada, central bankers in both countries are \u201cset to declare victory\u201d as the \u201cbroader economy will reap rewards.\u201d<\/p>\n<p style=\"text-align: justify;\">Canada is nearing its inflation target rate, with its Consumer Price Index (CPI) at 2.5%. Lowering mortgage rates would close the remaining CPI gap, bringing it to 2%.<\/p>\n<p style=\"text-align: justify;\">\u201cWhen inflation is somewhat troubling, and interest rates are already moderate, you need a lot of economic pain to induce a major drop in interest rates,\u201d Shenfeld added. \u201cBut with inflation soon to be vanquished and real interest rates still at restrictive levels, there\u2019s no logical reason for central bankers to move too cautiously to provide relief.\u201d<\/p>\n<p style=\"text-align: justify;\">Shenfeld said both countries are also experiencing softening job markets, and \u201ccutting rates materially is really a no-brainer.\u201d<\/p>\n<p style=\"text-align: justify;\">The report further noted that a more accelerated cut would help Canada stay out of a recession as the country\u2019s labour market has shown weakness.<\/p>\n<p style=\"text-align: justify;\">The cuts would impact housing and other \u201cinterest-sensitive sectors,\u201d but the full effect likely wouldn\u2019t be seen until 2026. Canada still faces the challenges of upcoming mortgage renewals in the next two years and \u201cthe drag from greater household sector indebtedness.\u201d<\/p>\n<p style=\"text-align: justify;\">Moreover, political uncertainties like US trade policy still pose risks to Canada\u2019s economy, as well as wars in Europe and the Middle East.<\/p>\n<p style=\"text-align: justify;\">\u201cWith inflation cooling globally, central banks can now be important players in countering downside risks to growth,\u201d concluded Shenfeld.<\/p>\n<p><a href=\"https:\/\/dailyhive.com\/vancouver\/cibc-bank-of-canada-interest-rate-cuts-report\" target=\"_blank\" rel=\"noopener\">CIBC : Bank of Canada Could Cut Interest Rate to 3% in Less Than Five Months<\/a> by Imaan Sheikh | Urbanized | DH<\/p>\n","protected":false},"excerpt":{"rendered":"<p>CIBC predicts the Bank of Canada (BoC) will push for more aggressive rate cuts, and Canadians could see a significant drop as soon as December. In June, the Bank dropped &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2024\/09\/bank-of-canada-will-push-for-more-aggressive-rate-cuts-in-less-than-5-months\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9,13],"tags":[],"class_list":["post-24618","post","type-post","status-publish","format-standard","hentry","category-mortgage","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Bank of Canada will Push for More Aggressive Rate Cuts in Less Than 5-Months &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2024\/09\/bank-of-canada-will-push-for-more-aggressive-rate-cuts-in-less-than-5-months\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Bank of Canada will Push for More Aggressive Rate Cuts in Less Than 5-Months &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"CIBC predicts the Bank of Canada (BoC) will push for more aggressive rate cuts, and Canadians could see a significant drop as soon as December. 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