Bank of Canada's upcoming interest rate decision

Bank of Canada’s Interest Rate Decision

The Bank of Canada (BoC) is set to announce its latest interest rate decision on Wednesday, June 4, and the real estate market is watching closely. After holding rates steady in April and May, economists are divided on whether the central bank will cut rates this week or wait for clearer economic signals.

For real estate investors and homebuyers, the BoC’s decision could influence mortgage rates, affordability, and market activity. Here’s what Canada’s biggest banks are predicting—and what it means for your next move.

Key Factors Influencing the BoC’s Decision

Before making its rate announcement, the BoC has highlighted several critical considerations:

  • Trade uncertainty (impact of U.S. tariffs on Canadian exports)
  • Slowing job market (unemployment rose to 6.9% in April)
  • Core inflation remains elevated (above 3%)
  • Weak GDP growth (economy expanded just 0.1% in March)

While some economists argue that another rate cut is needed to stimulate growth, others believe the BoC will hold steady to avoid fueling inflation.

What the Big Banks Are Saying

1. TD Bank: Two More Cuts Likely in 2025

  • June Prediction: Hold (no change)
  • Outlook: TD expects two more cuts later this year, citing weakening job markets and sluggish economic growth.

2. RBC: A Close Call, But Likely a Hold

  • June Prediction: Hold
  • Outlook: RBC believes the BoC will wait for more data before cutting again, especially with inflation still above target.

3. Scotiabank: No Cuts Until Inflation Cools Further

  • June Prediction: Hold
  • Outlook: Scotiabank argues the BoC won’t cut until core inflation drops significantly, possibly not until 2026.

4. CIBC: A Cut Would Be Justified, But Unlikely Now

  • June Prediction: Hold (but dovish messaging)
  • Outlook: CIBC thinks the BoC should cut now due to economic weakness but expects a July or September cut instead.

5. BMO: Rates Will Stay Put for Now, But More Cuts Coming

  • June Prediction: Hold
  • Outlook: BMO forecasts rate cuts resuming in late July, with the overnight rate potentially falling to 2.0% by early 2026.

What This Means for Real Estate

If the BoC Holds Rates (Most Likely Scenario)

  • Mortgage rates remain stable in the short term.

  • Buyers may delay decisions, waiting for future cuts.

  • Sellers could see slower demand if affordability doesn’t improve.

If the BoC Surprises With a Cut

  • Mortgage rates could dip slightly, boosting buyer activity.

  • Investors may move quickly to lock in lower financing costs.

  • Market sentiment could improve, supporting home prices.

Should You Buy, Sell, or Wait?

  • Buyers: If mortgage rates drop later this year, waiting could pay off—but inventory may tighten.

  • Sellers: A hold means steady demand, but a future cut could bring more buyers into the market.

  • Investors: Watch for July’s decision—if the BoC cuts then, real estate could see a late-summer surge.

Stay tuned for Upstate Realty’s post-announcement analysis on Wednesday afternoon!

Need expert advice on navigating the market? Contact Upstate Realty today to discuss your next move! 🏡📉📈

🔹 Call us at (416) 581-8000
🔹 Visit our website: www.upstaterealty.ca

Source: Zakiya Kassam, Where Every Big Bank Stands On Wednesday’s Interest Rate Announcement (June 2, 2025)