Bank of Canada Rate Announcement Oct 23rd, 2024

Josh Perez • October 23, 2024

Bank of Canada reduces policy rate by 50 basis points to 3¾%.


FOR IMMEDIATE RELEASE

Media Relations

Ottawa, Ontario

October 23, 2024


The Bank of Canada today reduced its target for the overnight rate to 3¾%, with the Bank Rate at 4% and the deposit rate at 3¾%. The Bank is continuing its policy of balance sheet normalization.


The Bank continues to expect the global economy to expand at a rate of about 3% over the next two years. Growth in the United States is now expected to be stronger than previously forecast while the outlook for China remains subdued. Growth in the euro area has been soft but should recover modestly next year. Inflation in advanced economies has declined in recent months, and is now around central bank targets. Global financial conditions have eased since July, in part because of market expectations of lower policy interest rates. Global oil prices are about $10 lower than assumed in the July Monetary Policy Report (MPR).


In Canada, the economy grew at around 2% in the first half of the year and we expect growth of 1¾% in the second half. Consumption has continued to grow but is declining on a per person basis. Exports have been boosted by the opening of the Trans Mountain Expansion pipeline. The labour market remains soft—the unemployment rate was at 6.5% in September. Population growth has continued to expand the labour force while hiring has been modest. This has particularly affected young people and newcomers to Canada. Wage growth remains elevated relative to productivity growth. Overall, the economy continues to be in excess supply.


GDP growth is forecast to strengthen gradually over the projection horizon, supported by lower interest rates. This forecast largely reflects the net effect of a gradual pick up in consumer spending per person and slower population growth. Residential investment growth is also projected to rise as strong demand for housing lifts sales and spending on renovations. Business investment is expected to strengthen as demand picks up, and exports should remain strong, supported by robust demand from the United States.


Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.3% in 2026. As the economy strengthens, excess supply is gradually absorbed.


CPI inflation has declined significantly from 2.7% in June to 1.6% in September. Inflation in shelter costs remains elevated but has begun to ease. Excess supply elsewhere in the economy has reduced inflation in the prices of many goods and services. The drop in global oil prices has led to lower gasoline prices. These factors have all combined to bring inflation down. The Bank’s preferred measures of core inflation are now below 2½%. With inflationary pressures no longer broad-based, business and consumer inflation expectations have largely normalized.


The Bank expects inflation to remain close to the target over the projection horizon, with the upward and downward pressures on inflation roughly balancing out. The upward pressure from shelter and other services gradually diminishes, and the downward pressure on inflation recedes as excess supply in the economy is absorbed.


With inflation now back around the 2% target, Governing Council decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of the 1% to 3% range. If the economy evolves broadly in line with our latest forecast, we expect to reduce the policy rate further. However, the timing and pace of further reductions in the policy rate will be guided by incoming information and our assessment of its implications for the inflation outlook. We will take decisions one meeting at a time. The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.


Information note

The next scheduled date for announcing the overnight rate target is December 11, 2024. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on January 29, 2025.


Read the October 23rd, 2024 Monetary Report.


Josh Perez
GET STARTED

New to Credit? Let’s Build a Solid Foundation

By Josh Perez • September 24, 2025
Starting from Scratch: How to Build Credit the Smart Way If you're just beginning your personal finance journey and wondering how to build credit from the ground up, you're not alone. Many people find themselves stuck in the classic credit paradox: you need credit to build a credit history, but you can’t get credit without already having one. So, how do you break in? Let’s walk through the basics—step by step. Credit Building Isn’t Instant—Start Now First, understand this: building good credit is a marathon, not a sprint. For those planning to apply for a mortgage in the future, lenders typically want to see at least two active credit accounts (credit cards, personal loans, or lines of credit), each with a limit of $2,500 or more , and reporting positively for at least two years . If that sounds like a lot—it is. But everyone has to start somewhere, and the best time to begin is now. Step 1: Start with a Secured Credit Card When you're new to credit, traditional lenders often say “no” simply because there’s nothing in your file. That’s where a secured credit card comes in. Here’s how it works: You provide a deposit—say, $1,000—and that becomes your credit limit. Use the card for everyday purchases (groceries, phone bill, streaming services). Pay the balance off in full each month. Your activity is reported to the credit bureaus, and after a few months of on-time payments, you begin to establish a credit score. ✅ Pro tip: Before you apply, ask if the lender reports to both Equifax and TransUnion . If they don’t, your credit-building efforts won’t be reflected where it counts. Step 2: Move Toward an Unsecured Trade Line Once you’ve got a few months of solid payment history, you can apply for an unsecured credit card or a small personal loan. A car loan could also serve as a second trade line. Again, make sure the account reports to both credit bureaus, and always pay on time. At this point, your focus should be consistency and patience. Avoid maxing out your credit, and keep your utilization under 30% of your available limit. What If You Need a Mortgage Before Your Credit Is Ready? If homeownership is on the horizon but your credit history isn’t quite there yet, don’t panic. You still have a few options. One path is to apply with a co-signer —someone with strong credit and income who is willing to share the responsibility. The mortgage will be based on their credit profile, but your name will also be on the loan, helping you build a record of mortgage payments. Ideally, when the term is up and your credit has matured, you can refinance and qualify on your own. Start with a Plan—Stick to It Building credit may take a couple of years, but it all starts with a plan—and the right guidance. Whether you're figuring out your first steps or getting mortgage-ready, we’re here to help. Need advice on credit, mortgage options, or how to get started? Let’s talk.

Bank of Canada Rate Announcement Sept 17th, 2025

By Josh Perez • September 17, 2025
Bank of Canada lowers policy rate to 2½%.  FOR IMMEDIATE RELEASE Media Relations Ottawa, Ontario September 17, 2025 The Bank of Canada today reduced its target for the overnight rate by 25 basis points to 2.5%, with the Bank Rate at 2.75% and the deposit rate at 2.45%. After remaining resilient to sharply higher US tariffs and ongoing uncertainty, global economic growth is showing signs of slowing. In the United States, business investment has been strong but consumers are cautious and employment gains have slowed. US inflation has picked up in recent months as businesses appear to be passing on some tariff costs to consumer prices. Growth in the euro area has moderated as US tariffs affect trade. China’s economy held up in the first half of the year but growth appears to be softening as investment weakens. Global oil prices are close to their levels assumed in the July Monetary Policy Report (MPR). Financial conditions have eased further, with higher equity prices and lower bond yields. Canada’s exchange rate has been stable relative to the US dollar. Canada’s GDP declined by about 1½% in the second quarter, as expected, with tariffs and trade uncertainty weighing heavily on economic activity. Exports fell by 27% in the second quarter, a sharp reversal from first-quarter gains when companies were rushing orders to get ahead of tariffs. Business investment also declined in the second quarter. Consumption and housing activity both grew at a healthy pace. In the months ahead, slow population growth and the weakness in the labour market will likely weigh on household spending. Employment has declined in the past two months since the Bank’s July MPR was published. Job losses have largely been concentrated in trade-sensitive sectors, while employment growth in the rest of the economy has slowed, reflecting weak hiring intentions. The unemployment rate has moved up since March, hitting 7.1% in August, and wage growth has continued to ease. CPI inflation was 1.9% in August, the same as at the time of the July MPR. Excluding taxes, inflation was 2.4%. Preferred measures of core inflation have been around 3% in recent months, but on a monthly basis the upward momentum seen earlier this year has dissipated. A broader range of indicators, including alternative measures of core inflation and the distribution of price changes across CPI components, continue to suggest underlying inflation is running around 2½%. The federal government’s recent decision to remove most retaliatory tariffs on imported goods from the US will mean less upward pressure on the prices of these goods going forward. With a weaker economy and less upside risk to inflation, Governing Council judged that a reduction in the policy rate was appropriate to better balance the risks. Looking ahead, the disruptive effects of shifts in trade will continue to add costs even as they weigh on economic activity. Governing Council is proceeding carefully, with particular attention to the risks and uncertainties. Governing Council will be assessing how exports evolve in the face of US tariffs and changing trade relationships; how much this spills over into business investment, employment, and household spending; how the cost effects of trade disruptions and reconfigured supply chains are passed on to consumer prices; and how inflation expectations evolve. The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. We will support economic growth while ensuring inflation remains well controlled. Information note The next scheduled date for announcing the overnight rate target is October 29, 2025. The Bank’s October Monetary Policy Report will be released at the same time.