Get ready for interest rates to start falling. The last major data point to be released prior to the Bank of Canada decision focused on GDP and Canada’s economy, it turns out, is performing more poorly than expected.
The Q1 GDP report showed economic growth of 1.7 per cent – about a half point below the consensus figure north of two per cent. So, with that in hand, along with softening retail sales and job vacancies falling, there is a general consensus now among economic observers that the central bank will begin the process of lowering interest rates.
And that should come this week.
Back when interest rates started to rise on fears of rising inflation, central banks moved quickly, pushing them up regularly and sometimes in larger increments.
It is unlikely we’ll see same track on downside. Rate declines will come in smaller steps to ensure inflationary fires are held at bay while still easing some cost-of-living pressures, especially around the price of mortgages.
