interest rate: Latest News

Reining in government spending could take some of the pressure off the Bank of Canada in tamping down inflation and help limit pain for debt-ridden Canadians, according to a new report from CIBC.

The annual rate of inflation dropped sharply last month, but some economists argue a slowdown might not be enough to deter the Bank of Canada from another rate hike in July.

The Bank of Canada ended its interest rate pause on Wednesday as it looks to stamp out inflation and cool the country’s red-hot economy.

Bank of Canada’s interest rate pause is set for its toughest challenge yet on Wednesday as policymakers weigh whether another hike is needed to quell a resilient economy and push inflation down further.While money markets and some economists say that another hike is in the cards for this week’s interest rate decision, those who spoke to Global News argue the central bank is better off waiting to move off the sidelines and signalling a possible increase later this summer.The Bank of Canada’s rate hike campaign has been on a “conditional pause” since March, following eight consecutive increases that raised the central bank’s policy rate to 4.5 per cent, up from the lows of 0.25 per cent seen through much of the pandemic.The central bank said it could remain on pause as long as data continued to show the economy was cooling enough to bring inflation back down to its two per cent target, which has been forecast to reach in 2024.The rate increases to date have raised the cost of borrowing for Canadians and their banks in an effort to cool the economy and take some of the steam out of inflation, which reached 40-plus-year highs in 2022.Inflation has declined significantly, though Statistics Canada’s headline reading ticked back up slightly to 4.4 per cent in the latest consumer price index report for April from March’s 4.3 per cent.The economy, meanwhile, has proved hotter than the Bank of Canada’s estimates: gross domestic product (GDP) was higher than forecast in the first quarter of the year, and expectations of a pronounced slowdown haven’t yet materialized.Avery Shenfeld, chief economist at CIBC Capital Markets, tells Global News that the economy can only run unchecked for so long before a flurry of spending drives prices

The national economy continued to grow overall in the first quarter of 2023 as consumers spent more in the face of recession fears, according to Statistics Canada.

real estate investors might ratchet up the pain in the rental market in the coming years.The report, released Monday from CIBC and Urbanation, shows that for a majority of real estate investors in the Greater Toronto Area (GTA), the business case for their rental properties is falling apart.

mortgage rates are ratcheting up the pressure on Canadian landlords, especially young investors who are facing the harsh side of the interest rate cycle for the first time.A report released Thursday by Royal LePage shows higher payments are even pushing some housing investors to consider selling off their properties. But for 32-year-old Karim Najjar, that decision is about more than just writing off the loss on an investment.Najjar moved to Ottawa from Edmonton in 2017 and jumped into the housing market a year after he arrived.His timing into the market was good, Najjar recalls, as home prices soared in his first few years of ownership.

The annual rate of inflation rose slightly in April as Canadians paid more at the gas pumps, bucking a streak that had seen price pressures easing year-over-year since the summer in Canada.

interest rates are putting stress on Canadian real estate — but it’s not just homeowners feeling the pinch.Experts are warning that Canada’s commercial real estate sector could be a “canary in the coal mine” for a steeper downturn in the economy as an uncertain return to the workplace leaves many office landlords in a precarious position.Much of the fears for commercial real estate — a sector that includes office towers, retail spaces, warehouses and production plants — stem from the United States and recent instability in the banking industry.First Republic, a regional bank that catered to a wealthy clientele, was the latest casualty of the instability that has seen shockwaves spread beyond the U.S. to global banking institutions.It was Charlie Munger, vice-president of Berkshire Hathaway and right-hand man to investment magnate Warren Buffett, who rang alarm bells over the weekend about the state of U.S.

Bank of Canada will hold interest rates at the 15-year high 4.50 per cent until the end of 2023, before starting to cut rates at the start of next year, according to a median of market participants in the central bank’s survey released on Monday.The bank’s survey of market participants, the second iteration of the poll first released in February, showed a median of the participants forecasting interest rates dropping to 3.0 per cent by the end of 2024.Market participants in the first survey released in February had said rates would fall to 4.0 per cent by the end of the year.A median of 26 participants predicted a 0.1 per cent contraction of gross domestic product at the end of 2023, compared with a 0.4 per cent decline forecast in the last survey.The participants, surveyed from March 9 to 23, cited weaker housing market and tightening of financial conditions among top risks that could curtail Canadian growth.The bank raised interest rates eight consecutive times through January in an effort to cool high inflation that peaked at a four decade high last year.The bank has since kept rates steady at two meetings, in part because Governor Tiff Macklem has said the goal is to slow growth, but avoid a recession.Annual inflation rate eased to 4.3 per cent in March, but is still more than double the bank’s two per cent target.

interest rates over the last year is starting to throttle the pace of homebuilding, the Canada Mortgage and Housing Corp. (CMHC) warned in a new housing supply report Wednesday.As the Bank of Canada’s interest rates rose substantially through 2022 and early 2023, many homebuyers were priced out of the market and home values retrenched from their pandemic-era highs.

Inflation and fears about the direction of the economy are putting a chill in most Canadians’ summer travel plans, according to new polling.But experts tell Global News “budget-conscious” vacations are still in the cards for many looking to get away.Roughly six in 10 Canadians are scaling back their vacation plans due to inflation or the uncertain economic content, according to an Ipsos poll conducted exclusively for Global News. Read more: Need a cheap getaway? Here’s where to go if you’re looking to save on airfare The results of the survey released Sunday show that almost a quarter of Canadians feel there is no way a summer vacation would be affordable.“Just as inflation was the ‘Grinch that stole Christmas’, so too it’s rearing its ugly head again and it’s impacting the summer vacation plans for a lot of Canadians,” says Sean Simpson, senior vice-president of Ipsos Global Affairs.While overall inflation has eased from highs seen last summer, price pressures have been particularly sticky on the services side of the equation, affecting how much Canadians pay for hotels, dining out and other travel-related expenses.And after a year that saw rising interest rates push up costs Canadians are paying on their debt, roughly six in 10 respondents say they’re prioritizing other expenses over vacations this year.But for many Canadians, vacations are out of reach when they matter most.

Bank of Canada left its benchmark interest rate unchanged on Wednesday, in keeping with expectations from economists.The decision to keep its key policy rate at 4.5 per cent in its second consecutive meeting comes after a year of rapid rate hikes aimed at taming inflation. Read more: U.S.

The Bank of Canada is expected to hold its key interest rate steady this week as inflation continues to slow, despite other data suggesting the economy is still running hot.

Ottawa’s 2023 budget — will Canada’s previously roaring economy coast into a so-called “soft landing” as it slows, or tumble sharply into a recession?Ongoing calls from a chorus of economists predicting a recession to hit Canada in 2023 have come up against surprisingly strong economic data in the early part of the year, making the tea leaves of an economic downturn especially hard to read.A recession is a widespread decline in economic activity over a certain period of time – usually defined as two straight quarters of negative growth.Ottawa’s 2023 budget bases its economic forecast on a consensus of private sector economists.That document, released March 28, showed that economists’ place the odds of a recession higher than when they were last polled for the 2022 fall economic update.But if the economy is supposed to be slowing down right now, someone might want to tell the economy.January’s gross domestic product (GDP) figures outpaced initial estimates from Statistics Canada with 0.6 per cent growth, rebounding from the flat reading in the final quarter of 2022.Canada’s labour market meanwhile held tight with a 5.0 per cent unemployment rate through the first quarter of 2023. The country’s employers have been in a hiring mood as of late, with net 383,000 positions added since last September.

Despite a sizeable drop in home prices over the past year and a slew of federal government measures aimed at addressing housing affordability, a new poll suggests Canadians are no more encouraged about breaking into the housing market.

The 2023 federal budget saw the Liberals hike up their spending plans and devote plenty of attention to affordability concerns, but experts are unconvinced the proposals will make a dent on the finances of everyday Canadians, nor the country’s economic trajectory.

Finance Minister Chrystia Freeland pledged on Monday that the Liberals would provide “additional, targeted inflation relief” to vulnerable Canadians in the 2023 federal budget.

The fallout from the collapse of Silicon Valley Bank has spread to the Canadian mortgage market, with some forecasters now expecting the Bank of Canada to cut interest rates sooner than previously thought.

Silicon Valley Bank (SVB) has sent aftershocks through the global financial system and Canada is not immune from the impacts.The Toronto-based branch of the startup-focused financial institution was temporarily seized by Canada’s banking regulator on Sunday night as Finance Minister Chrystia Freeland echoed her American counterparts in calling for calm in the face of market uncertainty and fears of contagion spreading to banks north of the border. Read more: Silicon Valley Bank collapse: How the financial institution fell into ruin Experts who spoke to Global News on Monday said that most Canadians can be confident in the country’s banking system, but fallout from SVB’s collapse could be more substantial in some parts of the economy.Here’s what to know.U.S.

This article is part of Global News’s Home School series, which gives Canadians the basics they need to know about the housing market that they never learned in school.Entering the housing market is viewed by many Canadians as an attractive choice, both financially and for the security of having a home to call your own.The goal is common enough, but the how and when are trickier. How do you know when the timing is right to jump to owning from renting or living with family? Read more: Should you rent or buy a home? Why that calculation might be changing What makes the question so difficult is that it’s not just a matter of dollars and cents — personal circumstances, long-term goals and other life changes all factor into what ends up being, for many, the biggest financial decision of their lives.Here’s what you need to know before you look to buy your first home.There’s one thing that can’t be ignored when buying a home — how much money you’re bringing in.Comparator site Ratehub.ca recently took a look at the minimum income needed to afford a home across 10 Canadian cities.

The Bank of Canada held its benchmark interest rate steady on Wednesday — a decision real estate players and economists say will have major implications for the Canadian housing market.

inflation and are doing everything they can to keep prices low for Canadians, pinning the blame on suppliers and the global market.But many MPs on the House of Commons agriculture committee were not buying what the CEOs were selling, repeatedly asking the executives to square rising profits with grocery costs that are forcing families to make hard choices at the checkout aisle.“How much profit is too much profit?” asked NDP Leader Jagmeet Singh, who has made food inflation and alleged “greedflation” by grocers a top issue for his party.“Is there no limit to how much profit you can make on the backs of Canadians that are struggling because they can’t afford their groceries?”“Reasonable profitability is an important part of operating a successful business,” said Loblaw Companies CEO Galen Weston Jr., who stated several times during his testimony that his company makes $1 in profit for every $25 sold.Singh, who’s not a regular member of the committee, advertised his showdown with Weston in a slate of social-media posts ahead of the meeting.Weston appeared alongside Metro Inc. CEO Eric La Fleche and Michael Medline, CEO of Empire Co., which operates chains including Sobeys, Safeway and FreshCo.All three companies and their executives have been increasingly under scrutiny for the prices of the food on their shelves.While headline inflation has shown signs of cooling in recent months, prices for food purchased from the grocery store were again up 11.4 per cent in January, according to Statistics Canada.An analysis from Dalhousie University’s Agri-Food Analytics Lab published in November found all three top grocers beat their five-year averages for profit in the first half of 2022, with Loblaw beating its previous best results

The Bank of Canada decided to hold its key interest rate steady Wednesday but made clear it’s still prepared to raise rates further depending on how inflation and the economy progress.

Statistics Canada said Tuesday.Gas prices were the biggest month-to-month Consumer Price Index report, the agency said, up 4.7 per cent from December.Food prices rose at a slightly higher rate than in December, up 10.4 per cent in January compared with 10.1 per cent the month before.Prices at the grocery store were higher for for meat (up 7.3 per cent), bakery products (up 15.5 per cent), dairy (up 12.4 per cent) and fresh vegetables (up 14.7 per cent).Statistics Canada said the cost fresh or frozen chicken rose 9.0 per cent annually, owed largely to avian flu outbreaks, supply chain kinks and strong seasonal demand.Canada’s annual inflation rate has been slowing since the summer, reaching 6.3 per cent in December.

inflation cooled to 6.9 per cent, according to Statistics Canada.Prices on food purchased from the grocery store continued to soar, rising 11.4 per cent to a new 41-year high.Last month, shoppers paid more for meat (7.6 per cent), dairy (9.7 per cent), bakery goods (14.8 per cent) and fresh vegetables (11.8 per cent), according to StatsCan.The agency says food prices have outstretched the overall inflation rate for 10 consecutive months. It pointed to unfavourable weather, higher prices on inputs such as fertilizer and natural gas, and continued disruption from Russia’s invasion of Ukraine as driving up prices.StatsCan said the drop in September’s headline inflation figure was largely thanks to lower gas prices.

The annual rate of inflation hit 6.8 per cent in April, marking a slight uptick from a month earlier, according to Statistics Canada.