The Bank of Canada raised its benchmark interest rate by 25 basis points on Wednesday to 4.5 percent – continuing its attempts to tackle inflation.
This is the eighth time in the last year that the Bank of Canada has hiked its rate, shocking many prospective homebuyers and leaving many with no choice but to pull back from the market.
While this last rate hike might seem like a kick in the pants to prospective buyers, it’s the smallest increase since March 2022 – and according to the bank, it will likely be the last for the next little while.
“With today’s modest increase, we expect to pause rate hikes while we assess the impacts of the substantial monetary policy tightening already undertaken,” Tiff Macklem, title here said in a press conference. “To be clear, this is a conditional pause – it is conditional on economic developments evolving broadly in line with our outlook.”
According to the Bank of Canada, inflation is projected to come down significantly this year. It’s expected that inflation will come down to approximately 3 percent by the middle of 2023 and will return back to its target rate of 2 percent by 2024.