Wednesday, September 7, 2022, the Bank of Canada is expected to make the next rate announcement. According to most analysts, this time BOC would increase the rate by .75%, bringing it to 3.25%.
Bank of Canada’s main target has been to control the nearly 40-year high inflation rate. With BOC’s aggressive rate hikes, the exploding inflation lost its steam and we saw it coming down to 7.6% from 8.1% seen in June 2022.
Replying to a question in his last speech by BOC Governor Tiff Macklem said that he has pre-emptively struck the inflation head-on in front-loaded the hike in the rate to see the immediate effect on inflation. With the inflation changing the course downwards it appears that BOC’s strategy has worked.
Some economists warn against the rising business and household debt resulting from this hike in rate increases.
Some experts believe that it could be the last hike BOC will make.
What will happen in future in the Real Estate market, no one can predict but listening carefully to the BOC’s Governor’s speech will be very important to gauge the next move by the BOC.
There are indications of the reversal of the housing price. I will share my analysis after we receive the Real Estate boards’ reports next week, stay tuned.
There is a good article on the topic in the Toronto Star today which can be read at: https://www.thestar.com/business/2022/09/02/boc-expected-to-raise-interest-rate-for-fifth-time-at-pivotal-moment-for-economy.html?source=newsletter&utm_content=a02&utm_source=ts_nl&utm_medium=email&utm_email=E6E2433D576AEE1ACF09328E207E0341&utm_campaign=sbj_142804
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A. Q. Mufti
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