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Bank of Canada could start cutting rates next year, says governor - BNN
12/19/2023 | Posted in Mortgage Interest Rates by Paul DeAdder | Back to Main Blog Page
The Bank of Canada could start cutting interest rates next year as long as core inflation comes down as predicted, BNN Television cited Governor Tiff Macklem as saying in an interview that aired on Monday.
The central bank made clear last Friday that rates were not going to fall any time soon, putting it on a divergent path from the U.S. Federal Reserve.
The bank raised rates by a quarter point in both June and July to a 22-year high and has left them on hold in the three policy-setting meetings since. Inflation slowed to 3.1% in October, down from a 2022 peak of more than 8%, but has remained above the bank's 2% target since March 2021.
BNN cited Macklem as saying rates could start to come down "sometime in 2024" but did not give more details.
Money markets expect the bank to begin easing as soon as April and for rates to fall at least 100 basis points in 2024..
The Bank of Canada had previously forecast inflation should hit 2% by end-2025 but Macklem - making his last public appearance of 2023 - told reporters last week should be closer to target by the end of next year.
Speaking to BNN Television, Macklem reiterated that the bank would want to see sustained downward momentum in measures of core inflation before it could contemplate rate cuts.
"(If) you look at our projection, it's some time next year, but I'm not going to put it on a calendar," an article on the BNN Television website quoted him as saying.
Source: Yahoo Finance
