Following the Bank of Canada’s third interest rate cut of the year, national home sales in Canada experienced a slight uptick in September compared to August. This trend mirrors the gains observed in the months subsequent to the first two rate cuts. However, experts suggest that while the pace of rate cuts is anticipated to accelerate, some potential buyers might choose to delay their purchases, potentially boosting the rebound expected in 2025.
Canada’s unemployment rate rose to 6.6% in August, prompting economists to call for more aggressive rate cuts from the Bank of Canada. While the central bank has already trimmed rates three times this year, some analysts believe a larger reduction is needed to support a weakening economy and prevent a recession.
The Bank of Canada’s governing council has a range of opinions on the timing of interest rate cuts, but agrees on a measured approach to monetary policy easing. While inflation is cooling, elevated housing costs remain a concern. The central bank emphasizes the need for patience and gradualism in reducing borrowing costs, indicating that a first rate cut could come as early as June.
Canadian retail sales declined by 0.1% in February and remained unchanged in March, indicating a sluggish economic recovery amid rising interest rates. The disappointing retail data has increased market expectations for a potential interest rate cut by the Bank of Canada in June, though the central bank has more economic data to consider before making a decision.
