Jun 16, 2022
By Jane Brown
Most economists agree the Bank of Canada will likely raise interest rates next month, maybe by as much as three-quarters of a percentage point.
The move would follow Wednesday’s .75-percent hike by the U.S. Federal Reserve.
While the Bank of Canada upped its interest rate by a half point, two times in recent months, Governor Tiff Macklem has hinted he is prepared to act more forcefully.
“The big implication for Canada is that the Bank of Canada takes cues from the federal reserve. We’ve already hiked overnight interest rates by 50-basis points in July. We could see more aggressive hikes in the future and those interest rate hikes will likely continue to soften housing demand,” explained TD Wealth’s Anthony Okolie to Zoomer Radio News.
Since the central bank began to increase interest rates to try and curb inflation, home prices have steadily declined.
A new report by Desjardins says the average home price in Canada fell 2.6 percent month to month in March and 3.8 percent in April.
The report says these decreases should continue, and will be experienced most significantly in Ontario where housing prices are expected to decline by 18 percent.