Bank of Canada has raised interest rates from 1.25% to 1.5%. The first rate move in six months.
Will it hurt the housing market? We will have to wait and see, but some things are going to get a little more expensive again.
The bank says persistent trade uncertainty and Canada’s tariff fight with the United States will shave nearly 0.7 per cent from economic growth by the end of 2020 — but it predicts the blow to be largely offset by the positive impact of higher oil prices.
The Bank of Canada is also releasing its quarterly update of projections, which predicts slightly stronger growth in both 2019 and 2020, compared with its outlook in April.
Looking ahead, the bank says it expects higher interest rates will be necessary over time to keep inflation near its target, however, it intends to continue along a gradual, data-dependent approach.