Interest Rate Update: Canadian Homeowners to See Relief Soon, but Maybe Not June 5, Analysts Say

A central bank interest rate cut is coming soon to offer relief to Canadian homeowners worried about mortgage payments, analysts agree. But they don’t quite agree on how soon. The central bank’s key interest rate, the overnight lending rate, has remained at 5 percent since July of last year amid persistent increases in the cost of living. Slowdowns in inflation over the last four months, though, have raised hopes among borrowers that the central bank will lower the interest rate as early as its next meeting, set for June 5. Others say persistent complaints about the rising price of the cost of living, with a 21.4 percent increase in the cost of food alone over the past three years, will prompt the central bank to pause before it lowers the interest rate, which generally has the effect of boosting spending and raising prices further. In that case, many analysts predict an interest rate cut will come only in the regulator’s July meeting....