The Bank of Canada's benchmark interest rate has successfully brought inflation back to its target rate of two percent. However, policymakers are concerned about a potential resurgence in the Canadian housing market and have decided to maintain the policy rate at 5.0 percent. While progress has been made, there are still risks to the inflation outlook, particularly in shelter price inflation. Cutting interest rates too early could reignite inflationary pressures and fuel the housing market. Caution is necessary to maintain stability.
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