People shop for fruits and vegetables at a supermarket in Ottawa, Ontario, Canada, March 27, 2023.
Interest rates in Canada are finally coming down. If you're wondering what this means after years of high inflation and several cycles of rising interest rates, you're not alone.Everyday necessities are not going to get cheaper because of the Bank of Canada's interest rate cuts. Prices are expected to keep rising, but the upside is that it will be at a much slower pace than in recent years.
The Bank of Canada is essentially trying to pull off what economists call a "soft landing" — reining in inflation without slipping into a recession.No. Prices are expected to keep rising, though at a much slower pace than in recent years now that inflation has slowed to 2.5 per cent. But any homeowners who locked their mortgage at a lower rate during the pandemic and now need to renew will probably end up renewing at a higher rate.
The Bank of Canada would need to cut rates faster if the economy was doing terribly or if there was a high risk of recession. Now that inflation seems a little bit more in control it has the room to approach rate cuts at a slower and more measured pace, says Orlando.
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