Good Morning!
The Bank of Canada has steadily lowered interest rates since June, with three quarter-point cuts in a row. Today, they announced a half-point cut, lowering the key rate to 3.75%. This move aims to get borrowing costs back to a more typical level after the sharp rate hikes we’ve seen over the past year.
Inflation has cooled off, hitting the bank’s 2% target in August and dropping further in September. While that’s good news, there’s now a risk inflation could dip too low if the economy doesn’t pick up soon.
At the moment, interest rates are more than a percentage point higher than what’s considered neutral, which is holding the economy back. Typically as interest rates drop home prices increase so this could be the beginning of a more active GTA housing market.
