The Bank of Canada raises its overnight rate to 1.00%
Updated: Feb 13
The Bank of Canada announced today that it has raised the overnight rate by .50% to 1.00%, to curb rising inflation due to "Russia's ongoing invasion of Ukraine which is causing unimaginable human suffering and new economic uncertainty. Price spikes in oil, natural gas and other commodities are adding to inflation around the world. Supply disruptions resulting from the war are also exacerbating ongoing supply constraints and weighing on activity.
These factors are the primary drivers of a substantial upward revision to the Bank's outlook for inflation in Canada." Bank of Canada will attempt to stay clear of triggering stagflation which is quite possible if interest rates rise too quickly. Bank of Canada understands it needs to strike a balance between curbing inflation, sustaining Canada's economic growth and monitoring the pressure levied against indebted households. Canada's surging inflation rate moved to a 30-year high of 5.7% recently, driven by high gas prices, soaring housing and rising food prices and this is well above the Bank of Canada's target rate of 2% that it had hoped to maintain.
Expect more rate hikes throughout 2022 from the Bank of Canada.
The next rate-setting day is June 1, 2022.
Now is the time to get in touch for a review of your mortgage strategy. It's important to get advice and a professional assessment of your situation if you want to switch your mortgage for a new rate, need a new mortgage, are renewing, or looking to refinance for debt consolidation, renovations, or other large expenditures.
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