Bank of Canada Holds Key Rate Steady Amidst Economic Outlook

In a move that didn't come as a surprise, the Bank of Canada opted to maintain its key lending rate at 5.00% during its latest announcement, marking the sixth consecutive hold.

While the decision aligns with expectations, economists speculate that the Bank might pivot towards rate cuts in the near future, responding to signals of an economic slowdown.

According to the Bank's statement, "While inflation remains a concern and risks persist, recent months have seen a moderation in both CPI and core inflation. The Bank will be vigilant in observing whether this trend continues." 

Projections from the Bank anticipate inflation hovering around 3% in the initial half of the year, gradually tapering below 2.50% in the latter half, with a target of reaching the neutral 2% mark by 2025. 

For mortgage holders, here's what to expect:

- Variable-rate mortgages: No immediate changes are anticipated, with the prime rate holding steady at 7.20% across most major lenders, barring TD with a slight variance at 7.35%.

- Fixed-rate mortgages: Your existing mortgage terms remain unaffected by the Bank's decision.

Looking ahead, we're closely monitoring economic indicators to gauge potential impacts on the timing of anticipated rate adjustments later this year. The Bank's next rate decision is slated for June 5.

Should you have inquiries or wish to explore adjustments to your mortgage strategy in light of these updates, feel free to reach out. We're here to assist you in navigating through these developments.