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Bank of Canada Holds (Again)

Bank of Canada holds Hero
In case you haven’t heard, the Bank of Canada held rates at 5% in their announcement this morning. This was widely expected, and marks a full six months since the last rate hike in mid-July. It seems the worst is over, and according to some outlets the discussion has shifted from ”are more hikes needed?” to ”how long do we need to hold rates this high?”

As I’ve mentioned, I don’t like to get into mind-reading the Bank’s statements, and what they did (or didn’t) say. They can say whatever they want, but their actions are much more significant. However, it’s worth noting that the press release removed the usual ”prepared to raise further” language that we saw throughout 2023.

If you looked at this chart, you’d think the Bank had made some dramatic cuts in the past few months. In fact they’ve done nothing... which, combined with the US explicitly talking about cuts, was enough to bring optimism to the market. Bonds are a market, and reflect the mood and forward outlook about the economy and borrowing costs. Bond yields declined a huge 1.25% from October to Christmas, and then moderated over the past few weeks as we saw news of higher inflation. 

Bank of Canada holds Graph

Summary
As expected, the Bank of Canada held rates at 5%. This marks six months since the last rate hike, with some optimism but no specifics about rate cuts in 2024.
 

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Pour plus d’informations, veuillez contacter:

Adam Jacobs

Head of Research | Canada

Toronto Downtown

Colliers Canada's head of research, leading a cross-country team of 20 mapping, analytics and research professionals. Formerly head of Canada research at Cushman Wakefield and Director of Analytics at Oxford Properties. Featured in mainstream publications such as the Toronto Star, industry publications and podcasts. Specializing in the big picture and the fundamentals driving real estate - demographics, the macro environment and the global economy. 

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