Bank of Canada Holds Rates at 2.75%

The Bank of Canada (BoC) has decided to hold its key interest rate at 2.75%, marking the first pause after seven consecutive cuts since June 2024. While this signals a cautious approach amid economic uncertainty, the central bank warns that escalating U.S. trade tariffs could push Canada into a recession.

For homebuyers, sellers, and investors, this decision has significant implications. Here’s what you need to know.

Key Takeaways from the BoC Announcement

1. Interest Rates on Hold—For Now

• After months of cuts, the BoC is taking a wait-and-see approach, assessing how U.S. trade policies impact Canada’s economy.
• The next rate decision is scheduled for June 4, 2025, with updated economic forecasts.

2. Two Possible Economic Scenarios

The BoC did not provide its usual economic projections, instead outlining two potential scenarios:

Scenario 1: Tariffs Are Resolved

• If trade tensions ease, Canada’s economy could see moderate growth after a weak Q2.
• Inflation could dip to 1.5% before stabilizing at the BoC’s 2% target.
• Impact on Real Estate: Stable rates could keep buyer demand steady, supporting home prices.

Scenario 2: Full-Blown Trade War

• A prolonged trade conflict could trigger a deep recession in 2025-2026.
• Inflation could spike to 3.5% by mid-2026.
• Impact on Real Estate: Higher inflation may lead to future rate hikes, cooling the housing market. Buyers could face higher borrowing costs, while sellers may see slower demand.

3. What This Means for the GTA Housing Market

• Buyers: With rates holding steady, now could be a good time to lock in a mortgage before potential future hikes.
• Sellers: Demand remains stable, but economic uncertainty means pricing strategically is key.
• Investors: Keep an eye on trade developments—if tariffs escalate, the market could shift.

Your 2025 Real Estate Strategy

Whether you’re buying your first home, upgrading, or investing, staying informed is crucial. At Upstate Realty, we help you navigate market shifts with expert advice tailored to your goals.

Why Choose Upstate Realty?

✅ Market Expertise – We analyze trends to guide your decisions.
✅ Personalized Service – From first-time buyers to seasoned investors.
✅ Strong Negotiation – Getting you the best deal in any market.

Let’s Make Your 2025 Real Estate Goals a Reality!

📞 Call Us: 416-581-8000
📧 Email: info@upstaterealty.ca
🌐 Visit: www.upstaterealty.ca

Your dream home—or next great investment—is within reach. Contact Upstate Realty today! 🏡

More to Come.

The next interest rate decision will be announced on June4, 2025, alongside the Bank’s updated economic and inflation outlook in the Monetary Policy Report (MPR).

Sourced By: Bank Of Canada, Press Release