T🇨🇦 The Big Announcement
The Bank of Canada (BoC) has officially held its key interest rate at 2.75% as of June 5, 2025. This decision came after multiple cuts over the past year, aiming to balance inflation control with economic growth.
This is the fourth consecutive pause after a total of 225 basis points were slashed since mid-2024.
“The current policy rate remains appropriate,” said the BoC in their official press release.
Why Does This Matter?
Interest rates directly affect mortgages, personal loans, credit cards, and business financing. With the BoC rate stable, most commercial banks in Canada are maintaining their prime rates at 4.95%, according to WOWA.
This impacts:
- Variable mortgage holders (less volatility, for now)
- New home buyers (better planning opportunity)
- Business loans and investment strategies
Economic Signals: Slowing but Stable
Canada’s Q1 2025 GDP grew by 2.2%, slightly above expectations. Still, underlying demand remains soft. According to Reuters, economists expect more cuts later in 2025 to support growth as inflation cools further.
BoC Governor Tiff Macklem emphasized that the central bank is closely monitoring global risks and domestic debt levels before making further changes.
What You Can Expect Next
The next interest rate announcement is scheduled for July 30, 2025. Analysts from leading banks like TD and RBC predict at least two more rate cuts by the end of the year if inflation continues to trend downward.
Mark your calendar and follow updates on Bank of Canada’s official site to stay informed.
What Should You Do?
If you’re a homeowner: Lock in a fixed mortgage rate if you prefer predictability. Variable rates may dip further, but cautiously.
If you’re investing: Lower interest rates could support the stock market and real estate. Consider diversifying.
If you’re saving: Watch for changes in high-interest savings accounts and GIC rates.
Read More:
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