Inflation is down - enough to bring the bank rate down and lower mortgage costs? June 5th is the next critical date

By Staff

May 21st, 2024

BURLINGTON, ON

 

Canada’s annual rate of inflation slipped to 2.7 per cent in April, from  2.9 the last time Statistics Canada reported.

It is said to be one of the last major pieces of data before the Bank of Canada’s next interest rate announcement.

Will that be enough of a decline for the Bank of Canada to start cutting interest rates at its June 5 meeting is another question.

A question that means a lot to people who have mortgages that are up for renewal.

While inflation rates and bank interest rates are national news – those numbers are about as local as they can get.

Some of the mortgage rate increases have been so high that people determined that they could no longer afford the house they were in the process of owning – which meant selling and turning to the rental market.

And we all know where that market is going.

 

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May 21st, 2024 | Category: News

3 comments to Inflation is down – enough to bring the bank rate down and lower mortgage costs? June 5th is the next critical date

• DHatch

  May 22, 2024 at 4:06 pm

  The answer is to reduce the overnight rate which will reduce the shelter component of the inflation rate. Not rocket science. The shelter costs have increased 6.8 year over year…they should have done this months ago.

• Ted Gamble

  May 22, 2024 at 4:05 pm

  Michael, 100% agree. There will be no significant reduction in the BOC rate for the foreseeable future. If there is ahead of the Fed the Canadian dollar will sink and prices will increase on imports. I would add though that we need to reduce provincial and municipal spending as well. The planned level of increases is unsustainable.

• Michael Hribljan

  May 21, 2024 at 10:09 am

  I’m not holding my breath on this one. The BOC target, and mandate is 2%, 2.7% is 35% higher than BOC target. The BOC’s mandate, and really only mandate is inflation below 2%, not making mortgage payments less.

  Shelter is approximately 30% weight of the CPI, given the inflation in shelter costs, it would require many of the other categories to go to 0% inflation to bring inflation below 2%. The math says this is a long way off.

  The solution is simple, the federal liberals need to stop with their inflationary budgets.