As was widely predicted, once again the Bank of Canada stayed the course with its overnight interest rate of five per cent. It has been five per cent since last July and, while the Bank is expected to begin lowering rates this year...not yet.
The announcement was accompanied by this explanation:
"Governing Council decided to hold the policy rate at 5% and to continue to normalize the Bank’s balance sheet. The Council is still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation. Governing Council wants to see further and sustained easing in core inflation and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians."
The BC Real Estate Association reacted with this prediction:
"We expect that the Bank will eventually lower its overight rate by 100 basis points this year, with the first rate cut happening in April or June."
The next interest-rate announcement is scheduled for April 10.