Fixed Policy Rate Targeting: How Much and When?

Experts expect the key rate to gradually decline in Canada and the United States, but will a sustainable target be reached in 2024?

• Also Read: Mortgage Renewal in 2024: Will Homeowners Benefit?

Economist Francis Gosselin reviews the interest rate situation hurting Canadian mortgage holders.

While many are due to renew it in 2024, they are encouraged by key rate cuts expected in the second half of the year.

Even if the Bank of Canada could make repeated cuts of 25 basis points in the key rate, when can we expect the country to reach the 2% key rate identified as a stable target?

AFP

For Bank of Canada Governor Tiff Macklem, the population needs to be patient, as the sustainability target will not be reached before 2025.

“Mortgage interest rates should not be expected to return to what they were during or before the pandemic. If the rate cuts happen by the end of 2024, it will probably be a quarter of a quarter point, another quarter point,” he shared in an interview with LCN, noting that everything will happen “gradually”.

TVA News

He said that although the inflation scenario has stabilized, it continues to create repercussions in the economy.

*Watch the interview in the video above*