Globe and Mail ~ December 19th, 2023
The big economic story for the coming year is the path of interest rates. With the U.S. Federal Reserve projecting three quarter-point cuts in 2024, naturally people are wondering how the Bank of Canada will handle this process – including those who are set to renew their mortgages.
As of Tuesday, markets are pricing in the first rate cut at the BoC’s April meeting, followed by another three quarter-point cuts by October. The bank’s next decision is on Jan. 24.
Still, the central bank has been careful to not engage in any discussion of rate cuts, and instead has stressed the importance of seeing more progress in controlling inflation. The next inflation report will be published on Jan. 16.
Before then, Statscan will release retail sales figures for October on Thursday. Lately, the numbers have shown that Canadians are pulling back on spending as they contend with the impact of higher interest rates. Statscan will also publish gross domestic product figures for October on Friday. The Canadian economy has stalled over the past two quarters, and the consensus view on Bay Street is that growth will be muted in the coming months.
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