Design district.Has the real estate market hit bottom? Today, the Bank of Canada raised interest rates by 75 basis points, raising the overnight interest rate to 3.25%. The bank interest rate in Canada is 3.5%, and the deposit rate is 3.25%.Please Visit: Design district to Get Your VVIP Registration Today!
After the rate hike, Canada’s policy interest rate is the highest among the major developed economies. September was also the fourth time in a row that Canada raised interest rates by more than 25 basis points. The Bank of Canada warned that policy rates still needed to be raised further, given the inflation outlook.
On the interest rate side, in addition to giving guidance that policy rates are still expected to rise further, the Bank of Canada said that as the impact of tighter monetary policy plays a role in the economy as a whole, it will assess how much interest rates need to be raised to bring inflation back to target levels. Remains firmly committed to price stability and will continue to take action as needed to achieve the 2 per cent inflation target.
The Bank of Canada continues to implement quantitative tightening (QT) policy, saying that quantitative tightening is a supplement to the increase in policy interest rates.
Global inflation remains stubbornly high and core inflation indicators are rising in most countries. In response, central banks continued to tighten monetary policy. Commodity prices fluctuated wildly, with oil, wheat and timber prices falling while natural gas prices rose. In Canada, CPI fell from 8.1 per cent to 7.6 per cent in July because of falling gasoline prices. However, inflation, excluding gasoline, is on the rise, indicating a further increase in price pressures, particularly in the service sector. The Bank of Canada’s core inflation indicator continued to rise, from 5 per cent to 5.5 per cent in July. The Bank of Canada noted that surveys show that short-term inflation expectations remain high, and the longer this continues, the greater the risk that high inflation will become entrenched.
The Bank of Canada believes that as the Canadian economy continues to operate with excess demand, this makes the labor market still tight. The bank also mentioned neighboring countries: while the US labour market remains tight, US economic activity has slowed.
For the housing market, there was unsustainable growth in the housing market during the COVID-19 epidemic, and as mortgage rates rose, the real estate market fell as expected by the Bank of Canada. If the interest rate hike continues, the real estate market will continue to cool.
The Bank of Canada said the performance of the global economy and the Canadian economy was in line with its forecast in July. The COVID-19 epidemic, continued supply disruptions and conflicts between Russia and Ukraine have continued to restrain economic growth and push up prices. The economy continues to be expected to slow in the second half of the year as global demand weakens and tighter monetary policy in Canada begins to bring demand more in line with supply.