11.2 C
Toronto
Tuesday, April 23, 2024

Bank of Canada to cut interest rates in half by end of next year: Desjardins

- Advertisement -spot_img

Bank of Canada is poised to take action to ease financial strain for Canadians. Desjardins Group, a prominent financial institution, forecasts that the central bank will initiate a series of interest rate cuts, providing some relief to borrowers across the country.

According to Chief Economist Jimmy Jean, Desjardins anticipates that the Bank of Canada could implement its first rate cut as early as April, with further reductions to follow throughout the year and into 2025. By the end of next year, Desjardins predicts that interest rates could be halved from their current level.

Jean emphasizes that these rate cuts are crucial to mitigate the economic fallout from aggressive monetary policies. He highlights Canada’s sensitivity to interest rates compared to the United States, where economic performance has outstripped expectations.

In contrast, Canada has faced challenges, with the economy already dipping into recession on a per-capita basis. However, Jean suggests that declining wages may prompt the Bank of Canada to move forward with rate cuts, bolstering confidence in economic recovery.

While lower borrowing costs are expected to provide relief, challenges remain on the horizon. Mortgage renewals in 2025 are anticipated to bring significant payment increases for Canadians, with average payments set to rise by approximately 34%. Variable rate mortgage holders could see even steeper increases of up to 54%.

These developments underscore the ongoing financial pressures faced by Canadian consumers. As the Bank of Canada navigates these challenges, its decisions will have far-reaching implications for households across the country.

- Advertisement -spot_img

Tiếng Việt

Must Read