Key rate cut: “We shouldn't expect rates to drop to pre-pandemic levels”

That's the consensus among economists: The Bank of Canada should announce a cut in its key rate on Wednesday morning.

• Also Read – Low key rate: Don't wait too long before buying, real estate broker warns

• Also Read – Fixed mortgage rates were already lower than standard rates before the Bank of Canada update

• Also Read – Will the mortgage debt increase soon?

While economists also expect three or four cuts over the course of the year, it would be surprising if the key rate returns to the same level as before the COVID-19 pandemic.

“We shouldn't expect rates to drop to pre-pandemic levels,” warned Louis Lévesque, head of the public policy committee of the Association of Quebec Economists, in an interview with Mario Dumont.

The economist also warns that the key rate cut will be slower than its increase.

“We should not expect the decline in interest rates to be as fast as the rise in 2022,” he said.

Given the criticism that central banks have been slow to raise the key rate, they are cautious about tapering.

“There was a whole debate in the community […] And since then, central banks have been under the impression that they acted too late to raise rates. So be careful not to fall too quickly.

Watch the full interview in the video above.