Key points:
- The Bank of Canada 2024 meetings are set to kick off next week.
- The bank determines the overnight lending rate, which lenders use to set the prime rate for mortgages and consumer loans.
Your guide to the Bank of Canada in 2024
Welcome to our deep dive into the heart of Canada’s financial landscape! In this video, I’ll unravel the mysteries behind the Bank of Canada’s key policy rate meetings for 2024, providing you with insights that could impact your financial journey.
Don’t feel like watching? Find the full transcript below!
Chris: [00:00:00] Did you know that the Bank of Canada meets eight times per year to set Canada’s key policy rate, otherwise known as the prime rate? The first meeting for 2024 is scheduled on Wednesday, January 24th. All the meetings are scheduled on Wednesdays, and they are scheduled approximately 6 to 8 weeks apart throughout the year.
Chris: [00:00:20] The Bank of Canada doesn’t actually set the prime rate for your mortgage or consumer loans. Instead, they set the overnight lending rate, which is used as a benchmark by your bank or lender to determine the cost of the prime rate on your mortgage or line of credit, or whatever consumer loan you have. These meetings are super important for Canada’s monetary policy to keep prices from going up too much. The goal is to keep inflation between 1 and 3%. This is what we call the target range. And that target range is set every five years by the Bank of Canada, along with the federal government. Since 2022, the bank of Canada has increased the policy rate by 5% to help bring inflation down. In 2024, we widely expect that the Bank of Canada will actually start reducing the policy rate by approximately 1.5%, which would bring your prime rate that you pay on your mortgage or line of credit from 7.2% to 5.7%.
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