In a recent article published in Les Affaires titled “Stock market: toward three or four interest rate cuts by the Bank of Canada,” Sébastien McMahon of IA Global Asset Management suggests the possibility of several potential rate cuts, including three or four by the end of the year.
According to Mr. McMahon of IA Global Asset Management, while the U.S. Federal Reserve is hesitant to lower its key interest rate, the Bank of Canada could do so as early as June or July. He even suggests the possibility of multiple rate cuts, possibly three or four by the end of the year.
In an article from La Presse titled “Finally ready for a rate cut?”, it is noted that since July 2023, the Bank of Canada has maintained its key interest rate at 5%, the highest level in 20 years. At the same time, the U.S. Federal Reserve has kept its rate between 5.25% and 5.5%.
Despite the strength of the U.S. economy, Canada could consider monetary easing in order to stimulate its own economy.
Furthermore, David-Alexandre Brassard believes that the expected near-term interest rate cuts in the United States are moving further away, which could slow down rate reductions in Canada. He thinks the Bank of Canada will likely reduce its key interest rate before the U.S. Federal Reserve, while ensuring that the gap between both remains limited. Higher U.S. interest rates would weaken the Canadian dollar, potentially increasing inflation in Canada through imported goods such as oil.
Mr. McMahon considers possible action by the Bank of Canada starting on July 24, or even as early as June 5. He believes that a rate cut could slightly weaken the Canadian dollar without creating major issues for imports. According to him, this could also encourage business investment and revive interest in Canadian stock markets.
Contact a Multi-Prêts mortgage broker to obtain the best mortgage conditions, whether for a purchase or refinancing. Anticipate a possible rate decrease in 2024 by adjusting your strategy with your broker. With them by your side, you can navigate the real estate market with confidence.