|Given the slowdown in inflation in the recently released CPI numbers in January, the Bank of Canada has left its overnight target rate unchanged, keeping it at 4.50%.
This is the Bank’s first rate hold of this rate-hike cycle, which began in March 2022. The move was expected by markets and is a welcome change to homeowners with Variable-rate or Adjustable-rate mortgages or HELOCS.
The Bank indicated “Governing Council will continue to assess economic developments and the impact of past interest rate increases, and is prepared to increase the policy rate further if needed to return inflation to the 2% target. The Bank remains resolute in its commitment to restoring price stability for Canadians.”
Bank earnings are under pressure with higher taxes and capital requirements, and the federal financial institution regulator is looking to tighten mortgage terms somehow. More will be know in mid-April when the comment period is over.
Officials from the Bank of Canada have indicated that its future rate decisions will be driven by economic data.
Next Bank of Canada meeting is scheduled for April 12, 2023
Source: Mortgage Professional Canada, Bank of Canada