As expected by mortgage and financial experts across Canada, the Bank of Canada today cut its overnight rate by .25%, taking the rate to 4.25%. And many of those experts are expecting the bank to make two more cuts before the end of 2024. In a statement, the bank said, "As expected, inflation slowed further to 2.5% in July. The Bank’s preferred measures of core inflation averaged around 2 ½% and the share of components of the consumer price index growing above 3% is roughly at its historical norm. High shelter price inflation is still the biggest contributor to total inflation but is starting to slow. Inflation also remains elevated in some other services.""In Canada, the economy grew by 2.1% in the second quarter, led by government spending and business investment. This was slightly stronger than forecast in July, but preliminary indicators suggest that economic activity was soft through June and July. The labour market continues to slow, with little change in employment in recent months. Wage growth, however, remains elevated relative to productivity."Penelope Graham of Ratehub.ca says there will be immediate benefits for variable rate mortgage holders, offering an example. “A homeowner who put a 10% down payment on a $486,828 home (for example) with a five-year variable rate of 5.55% amortized over 25 years (total mortgage amount of: $451,728) has a monthly mortgage payment of $2,770, says Graham. “With the .25% rate cut, that variable mortgage rate decreases to 5.3% and the monthly payment will decrease to $2,705.” “This means the homeowner will pay $65 less per month or $780 less per year on their mortgage payments.” Canadian Mortgage Professional (CMP) says a poll conducted by Reuters of 28 economists between August 27 and 29 foresaw today’s .25% cut, with expectations of additional cuts likely in the months ahead. Going forward, 70% of the economists forecasted further reductions (of .25% each) in October and December, which would bring the rate to 3.75% by year-end, marking a shift from a previous poll in July, where nearly 90% of respondents expected the rate to be at 4% or higher by the end of 2024. “The anticipated rate cuts come as inflation in Canada dropped to a 40-month low of 2.5% in July, edging closer to the Bank of Canada's target of 2%,” says CMP. “Meanwhile, the labour market is showing signs of weakness, further prompting the central bank to consider more easing.” "The Canadian economy is in worse shape than the US and we've got a more interest rate-sensitive economy," says Taylor Schleich, rates strategist at National Bank of Canada. "As a result, they're going to continue to cut after this meeting, in October and December, and probably in the first few meetings of 2025 as well." "The Q2 GDP data plays a crucial role in the BoC's decision-making process," says CMP, adding the economists polled by Reuters expect annualized growth of 1.6% for the second quarter, lower than Statistics Canada's preliminary estimate of 2.2% and Q1 growth of 1.7%. "From the BoC's perspective, it's a much clearer picture for them to form a decision rather than the Fed who still to this day has to contend with a lot of uncertainty in their inflation data as well as the labour market data," said Claire Fan of RBC. “If the poll results are accurate, the BoC will implement 75 basis points of rate cuts before the US Federal Reserve begins its own reductions,” says CMP. “This divergence in monetary policy hasn't negatively impacted the Canadian dollar, which has gained about 3% against its US counterpart in August, reaching a five-month high.” “Looking further ahead, the Reuters poll indicates expectations for an additional 100 basis points in rate cuts by the BoC in 2025, bringing the overnight rate to 2.75% by the end of that year. This projection is slightly lower than the 3% rate forecasted in last month's poll.".This is what the Western Standard is up againstThe Trudeau government is funding lies and propaganda by directly subsidizing the mainstream media. They do this to entrench the powerful Eastern, woke and corrupt interests that dominate the political, social and economic institutions in Canada. Federal authorities are constantly trying to censor us and stop us from publishing the stories that they don’t want you to read. Ottawa may weaponize our taxes and police against us, but we’ve got a powerful ally on our side.You. Free men, and free women. We need you to stand with us and become a member of the Western Standard. Here’s what you will get for your membership:Unlimited access to all articles from the Western Standard, Alberta Report, West Coast Standard, and Saskatchewan Standard, with no paywall. Our daily newsletter delivered to your inbox. .Access to exclusive Member-only WS events.Keep the West’s leading independent media voice strong and free.If you can, please support us with a monthly or annual membership. It takes just a moment to set up, and you will be making a big impact on keeping one the last independent media outlets in Canada free from Ottawa’s corrupting influence.
As expected by mortgage and financial experts across Canada, the Bank of Canada today cut its overnight rate by .25%, taking the rate to 4.25%. And many of those experts are expecting the bank to make two more cuts before the end of 2024. In a statement, the bank said, "As expected, inflation slowed further to 2.5% in July. The Bank’s preferred measures of core inflation averaged around 2 ½% and the share of components of the consumer price index growing above 3% is roughly at its historical norm. High shelter price inflation is still the biggest contributor to total inflation but is starting to slow. Inflation also remains elevated in some other services.""In Canada, the economy grew by 2.1% in the second quarter, led by government spending and business investment. This was slightly stronger than forecast in July, but preliminary indicators suggest that economic activity was soft through June and July. The labour market continues to slow, with little change in employment in recent months. Wage growth, however, remains elevated relative to productivity."Penelope Graham of Ratehub.ca says there will be immediate benefits for variable rate mortgage holders, offering an example. “A homeowner who put a 10% down payment on a $486,828 home (for example) with a five-year variable rate of 5.55% amortized over 25 years (total mortgage amount of: $451,728) has a monthly mortgage payment of $2,770, says Graham. “With the .25% rate cut, that variable mortgage rate decreases to 5.3% and the monthly payment will decrease to $2,705.” “This means the homeowner will pay $65 less per month or $780 less per year on their mortgage payments.” Canadian Mortgage Professional (CMP) says a poll conducted by Reuters of 28 economists between August 27 and 29 foresaw today’s .25% cut, with expectations of additional cuts likely in the months ahead. Going forward, 70% of the economists forecasted further reductions (of .25% each) in October and December, which would bring the rate to 3.75% by year-end, marking a shift from a previous poll in July, where nearly 90% of respondents expected the rate to be at 4% or higher by the end of 2024. “The anticipated rate cuts come as inflation in Canada dropped to a 40-month low of 2.5% in July, edging closer to the Bank of Canada's target of 2%,” says CMP. “Meanwhile, the labour market is showing signs of weakness, further prompting the central bank to consider more easing.” "The Canadian economy is in worse shape than the US and we've got a more interest rate-sensitive economy," says Taylor Schleich, rates strategist at National Bank of Canada. "As a result, they're going to continue to cut after this meeting, in October and December, and probably in the first few meetings of 2025 as well." "The Q2 GDP data plays a crucial role in the BoC's decision-making process," says CMP, adding the economists polled by Reuters expect annualized growth of 1.6% for the second quarter, lower than Statistics Canada's preliminary estimate of 2.2% and Q1 growth of 1.7%. "From the BoC's perspective, it's a much clearer picture for them to form a decision rather than the Fed who still to this day has to contend with a lot of uncertainty in their inflation data as well as the labour market data," said Claire Fan of RBC. “If the poll results are accurate, the BoC will implement 75 basis points of rate cuts before the US Federal Reserve begins its own reductions,” says CMP. “This divergence in monetary policy hasn't negatively impacted the Canadian dollar, which has gained about 3% against its US counterpart in August, reaching a five-month high.” “Looking further ahead, the Reuters poll indicates expectations for an additional 100 basis points in rate cuts by the BoC in 2025, bringing the overnight rate to 2.75% by the end of that year. This projection is slightly lower than the 3% rate forecasted in last month's poll.".This is what the Western Standard is up againstThe Trudeau government is funding lies and propaganda by directly subsidizing the mainstream media. They do this to entrench the powerful Eastern, woke and corrupt interests that dominate the political, social and economic institutions in Canada. Federal authorities are constantly trying to censor us and stop us from publishing the stories that they don’t want you to read. Ottawa may weaponize our taxes and police against us, but we’ve got a powerful ally on our side.You. Free men, and free women. We need you to stand with us and become a member of the Western Standard. Here’s what you will get for your membership:Unlimited access to all articles from the Western Standard, Alberta Report, West Coast Standard, and Saskatchewan Standard, with no paywall. Our daily newsletter delivered to your inbox. .Access to exclusive Member-only WS events.Keep the West’s leading independent media voice strong and free.If you can, please support us with a monthly or annual membership. It takes just a moment to set up, and you will be making a big impact on keeping one the last independent media outlets in Canada free from Ottawa’s corrupting influence.
