Bank of Canada Governor Tiff Macklem holds a press conference at the Bank of Canada in Ottawa on Wednesday, Oct. 23, 2024. THE CANADIAN PRESS/Sean Kilpatrick
OTTAWA – The Bank of Canada cut its key policy interest rate by 50 basis points on Wednesday to bring it to 3.75 per cent. Here’s what people are saying about the decision:
“High inflation and interest rates have been a heavy burden for Canadians. With inflation now back to target and interest rates continuing to come down, families, businesses and communities should feel some relief.” – Tiff Macklem, Bank of Canada governor.
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“Activity in Canada’s housing market has been sluggish in many regions due to higher borrowing costs, but today’s more aggressive cut to lending rates could cause the tide to turn quickly. For those with variable rate mortgages ““ who will benefit from the rate drop immediately ““ or those with fast-approaching loan renewals, today’s announcement is welcome news indeed.” – Phil Soper, president and CEO of Royal LePage.
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“This won’t be the end of rate cuts. Even with the succession of policy cuts since June, rates are still way too high given the state of the economy. To bring rates into better balance, we have another 150 bps in cuts pencilled in through 2025. So while the pace of cuts going forward is now highly uncertain, the direction for rates is firmly downwards.” – James Orlando, director and senior economist at TD Bank.
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“The size of the December rate cut will depend on upcoming job and inflation data, but a 25 basis point cut remains our baseline.” – Tu Nguyen, economist with assurance, tax and consultancy firm RSM Canada.
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“Today’s outsized rate cut is mostly a response to the heavy-duty decline in headline inflation in the past few months. However, the underlying forecast and the Bank’s mild tone suggest that the future default moves will be 25 bp steps, unless growth and/or inflation surprise again to the downside.” – Douglas Porter, chief economist at Bank of Montreal.
This report by The Canadian Press was first published Oct. 23, 2024.
