Yesterday the Statistics Canada announced a surprising INCREASE to inflation figures for February at 2.6% (up from 1.9% in January), yikes.
The increase came as federal government's temporary tax break (GST/HST Holiday) came to an end mid-February. Not only that, but actual figures came as a surprise to many economists, which called for a 2.2% increase.
Without a doubt, the Bank of Canada has a tough job ahead of them – given the political run-around regarding U.S. Tariffs, and a hotter than expected inflation landscape.
Last week, the BoC trimmed rates by 25 bps, now with a policy interest rate of 2.6%.
Here's where we stand now with regards to home prices, CPI and rates:
The next key date for the BoC: April 16, 2025
Macklem noted last week the central bank cannot fully offset the hit to Canada's economy from steep tariffs and will focus on how inflation reacts to pressures of a prolonged trade war. Expectations are that inflation will continue to rise, fuelled by tariffs.
All eyes are set on how the tariff situation unfolds in early April, while financial markets are pricing in a ~62% chance the BoC will hold rates steady. It's really a toss up at the moment of what will happen.
As always, I'll keep you up to date on the macro front with a Calgary focus, on real estate. Reach out if you have any questions at all!
As always, we're looking for inventory so if you're thinking about selling your home, please reach out and we'll schedule a call to see how we can help!