Rate Watch April 2024

April 10, 2024

Today, the Bank of Canada maintained its overnight lending rate, as anticipated.

Many have speculated about a potential rate cut in June, but is it truly a foregone conclusion?

In the realm of mortgages, few events generate as much speculation and anticipation as central bank meetings. Every decision made by institutions like the Bank of Canada reverberates across markets, shaping economic trajectories and influencing investment strategies. With the recent announcement of no change to the overnight lending rate, all eyes are now fixed on the upcoming Bank of Canada meeting scheduled for June 5th.

For months, economists and market observers have circled June as the likely date for a rate cut announcement. The prevailing narrative suggests that a rate cut is not just probable but almost inevitable. However, upon closer examination, the picture appears more nuanced, and the certainty surrounding a rate cut diminishes.

At the heart of the matter lies the crucial role of interest rates in managing inflation. The primary objective of higher interest rates is to rein in inflation, ensuring it remains within target levels. March brought promising news, with inflation in Canada showing signs of improvement at 2.8%. While this is certainly a step in the right direction, it falls short of the 2% target set by the Bank of Canada.

Moreover, recent developments in the United States serve as a cautionary tale. Data from across the border reveals a concerning trend with inflation accelerating to 3.5% for three consecutive months. This raises pertinent questions about whether Canada could experience a similar trajectory in inflationary pressures.

The prevailing sentiment among economists and analysts is one of cautious optimism tempered by apprehension. While hopes for a rate cut run high, there remains a palpable sense of uncertainty. Do we trust the consensus among economists and anticipate a rate cut, or do we heed the warning signs of potential inflationary pressures?

As we eagerly await the outcome of the Bank of Canada meeting in June, let us approach the future with a sense of cautious optimism. While the road ahead may be fraught with uncertainty, it is also brimming with opportunities for growth and prosperity. Let us remain vigilant, let us remain informed, and let us chart a course towards a brighter financial future together.


Christopher Molder

Mortgage Broker

Christopher is a mortgage broker based in Toronto, Canada. And a son of a broker too. He’s a second generation mortgage broker. Following in his father’s steps he joined the family mortgage business straight out of university.