The Bank of Canada announced a fifth consecutive rate hold, maintaining its key lending rate at 5% on Wednesday, March 6, with the central bank saying it was "too soon" for cuts and citing sticky inflation as a driving factor.
Although the market is looking forward to potential rate reductions starting in the second quarter of 2024, March serves as a significant indicator that these expected cuts might be delayed until later in the year.
Experts are predicting that these cuts will happen slowly, about 0.25% per quarter, up to a 2% decrease by the end of 2026. However, recent stubborn inflation rates have doubt on earlier projections of rate cuts.
Mark your calendars for the next update on this topic, scheduled for April 10, 2024.