RBC is projecting that the BoC will raise its rate to 3.5% by the end of the year, with a similar 3.5-3.75% rate expected from the US Fed. realestatenews housingmarket cdnpoli
as they attempt to battle runaway inflation. Canada is no exception, having implemented a surprising full percentage point increase to the overnight rate in July, raising it to its current 2.5% level. Later that month, the US Federal Reserve also took a bold step, introducing a second consecutive 75 basis point hike.RBC is projecting that the BoC will raise its rate to 3.5% by the end of the year, with a similar 3.5-3.75% rate expected from the US Fed.
The US, in particular, which showed signs of its inflation rate cooling to 8.5% in July, has seen two consecutive quarterly declines in GDP. Although this doesn’t technically count as a recession because labour markets continued to improve, “cracks are starting to appear,” the report says. In Canada, the slowdown may be less blatant — GDP was up 4.5% annually during the second quarter and unemployment rates in June and July were at record lows — but labour shortages are capping production growth and higher interest rates from the BoC are cutting into purchasing power. In fact, home resales fell 27% between March and June, with the national benchmark price dipping 3% from April to June.
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