You can find The Bank of Canada 2024 schedule for policy interest rate announcements and the release of the quarterly Monetary Policy Report below.
Interest rate announcements and the Monetary Policy Report
The scheduled dates for the interest rate announcements for 2024 are as follows:
- Wednesday, January 24* – NO CHANGE IN OVERNIGHT RATE!
- Wednesday, March 6 – NO CHANGE IN OVERNIGHT RATE!
- Wednesday, April 10* – NO CHANGE IN OVERNIGHT RATE!
- Wednesday, June 5 – 0.25% REDUCTION IN OVERNIGHT RATE! (Prime is now 6.95%)
- Wednesday, July 24* – 0.25% REDUCTION IN OVERNIGHT RATE! (Prime is now 6.70%)
- Wednesday, September 4
- Wednesday, October 23*
- Wednesday, December 11
*Monetary Policy Report published
All interest rate announcements will take place at 10:00 (ET), and the Monetary Policy Report will be published concurrently with the January, April, July and October rate announcements.
Current Inflation Situation
In Canada, we are currently facing a period of high inflation, which is a significant change from the norm. Over the past two years, the prices of goods and services have risen rapidly, affecting the purchasing power of the dollar and making life less affordable for Canadians. Inflation is measured by the annual change in the Consumer Price Index (CPI), and the Bank of Canada aims to keep this at 2 per cent. In June 2022, CPI inflation reached an unprecedented 8.1 per cent, marking a four-decade high. Since then, it has gradually decreased, reaching 2.8 per cent in June 2023.
The factors driving inflation have evolved over time. In 2021, high demand for goods, fueled by government support and low interest rates, collided with supply chain disruptions caused by COVID-19, leading to a surge in prices. Furthermore, global events such as Russia’s invasion of Ukraine significantly impacted food and energy prices. Oil prices have since declined, and supply chains have improved, leading to reduced shipping costs and a decline in goods inflation – the current inflation is increasingly influenced by rising service prices which are linked to the tight labor market and rapid wage growth.
To control inflation, the Bank of Canada utilizes interest rates. By raising rates, they make borrowing more expensive for households and businesses, reducing demand for goods and services and hopefully slowing the pace of price increases. Despite this, the Bank of Canada decided to maintain its benchmark interest rate at 5 per cent on December 6, 2023, a level last seen in April 2001. The BoC anticipates inflation to hover around 3 per cent for 2024 before gradually declining to the 2 per cent target by mid-2025. Personally, I don’t trust them at this point – after saying they wouldn’t touch rates until the end of 2023 and then increasing them drastically in 2022 & 2023 – I’m cautiously optomistic.
The changes in the Bank of Canada’s interest rates affect average Canadians primarily through mortgages and various forms of consumer debt, including credit cards, personal loans, and auto loans. Both variable and fixed-rate mortgages have experienced increases as a result. It’s important to note that interest rate adjustments typically have a lagged effect, often taking 18 to 24 months to fully impact economic growth and inflation. We’ve already observed the impact in the housing market, where sales volumes and prices have slowed this last year. More broadly, economic activity has started to slow, although less than initially expected.