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WEB The BoC Policy Rate Increased by 75 Basis Points
The Bank of Canada (BoC) recently announced a 75 basis point increase to its policy rate, bringing it to 4.25%. This is the seventh consecutive rate hike since March 2022, and the largest single increase since 1998.
This policy rate increase is intended to curb inflation, which has been running at a multi-decade high in Canada. The BoC has a mandate to keep inflation within a target range of 1% to 3%, and the current rate of 6.9% is well above that target.
The rate hike will impact Canadians in several ways. Variable-rate mortgages will see an immediate increase in their monthly payments, and fixed-rate mortgages will likely see higher rates when they come up for renewal.
The rate hike is also expected to slow down the housing market, as higher mortgage rates will make it more expensive to buy a home. This could lead to a decrease in home prices, which could benefit first-time homebuyers.
It is important to note that the BoC has stated that it will continue to raise interest rates until inflation is brought under control. This means that further rate hikes are likely in the future.
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