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<\/a><\/p>\nPhoto:\u00a0Fabian Blank<\/a>\/Unsplash<\/a><\/em><\/p>\n Canada\u2019s central bank has already taken forceful action this month to cut its influential overnight rate to support the country\u2019s economy through the coronavirus pandemic.<\/p>\n It moved on March 4th during one of its regularly scheduled announcements and again on March 13th in an emergency announcement to cut the rate by a cumulative full percentage point. But even with this swift movement earlier in March, the consensus among economists is that another cut is imminent due to the severity of the circumstances.<\/p>\n\n \u201cThe Bank of Canada and governments have been quick to respond to the crisis unveiling a wide range of policies aimed at helping companies and workers stay afloat. However additional measures are needed and we anticipate the Bank of Canada will cut its policy rate further to just 0.25%,\u201d wrote the RBC Economics team in a report titled Canada\u2019s Economy Enters Uncharted Waters<\/em>.<\/p>\n A cut to this level would mean the rate would reach the same low level as it did during the depths of the 2008-2009 Financial Crisis. The next scheduled Bank of Canada rate announcement is on April 15th, but with the rapidly evolving situation around the coronavirus pandemic, it\u2019s entirely possible the bank will make a move sooner than that.<\/p>\n When the central bank\u2019s overnight rate gets cut or remains at a low level for a prolonged period of time, typically mortgage rates see cuts and stay low for a corresponding period.<\/p>\n The Bank of Canada had kept the overnight rate at the relatively low level of 1.25 percent for well over a year before slashing it in response to the worsening coronavirus pandemic and oil price drops in early March. During the preceding period, Canadian mortgage rates remained at historically low levels and housing market momentum was building following a slowdown caused by stricter government rules around mortgage lending.<\/p>\n But despite a declining interest rate environment, experts aren\u2019t expecting strong activity levels in the housing market due to the prevailing mood of economic uncertainty and the strict social distancing and shutdown measures adopted by governments across Canada.<\/p>\n There is hope that the sustained period of low rates will allow for the market to bounce back quickly once the impact of the coronavirus wanes.<\/p>\n \u201c[Housing] activity is set to slow markedly\u2014likely both sales and listings\u2014although much lower rates should help a second-half revival,\u201d wrote<\/a> BMO Economist Priscilla Thiagamoorthy.<\/p>\n