Bank of Canada CUTS Interest Rate to 4.25%, Opens Door to Steeper Cuts

[@Sanchyfab]

Lower interest rates generally stimulate the economy by making borrowing cheaper for businesses and consumers.

[@NelleHummell]

This could help boost spending and investment, which is important if the economy is slowing down or facing challenges like inflation. Homebuyers could benefit too since mortgages would become more affordable, potentially lifting the real estate market

[@ericbergman7546]

That’s true, but there are downsides too. Cutting interest rates might signal that the economy is weaker than expected, and further rate cuts could indicate even bigger problems. Plus, lowering rates could fuel more borrowing, leading to higher levels of debt. If consumers or businesses over-leverage themselves, it could set up problems down the road when rates eventually go back up

[@AliciaCrone]

It’s a double-edged sword. While rate cuts can stimulate the economy in the short term, they could also create asset bubbles, particularly in housing, where we’ve already seen prices skyrocketing. If housing becomes over-inflated again, we might end up with a burst bubble similar to what we saw in the financial crisis. So, it’s definitely a move with both risks and rewards

[@georgeearling905]

and let's not forget how this affects savers. Lower interest rates hurt people who rely on fixed-income investments like bonds or savings accounts. With rates falling, their returns diminish, which is especially tough for retirees who count on those safe, steady returns.

[@RandyColby-mj1zm]

True, fixed-income investors definitely lose out when rates are slashed. That’s where having an analyst could really come in handy. An analyst can help people and businesses understand the broader implications of these rate cuts and adjust their strategies accordingly.

[@jampapalden462]

Bank of Canada interest 4.25% But why still over 6.01% other Banks?

[@PrimePropertiesTO]

If youre looking at variable, its prime rate, which is at 6.45 right now. Which means depending on your discount, 6% variable still makes sense. You probalby have a P-0.3% variable.

[@kevinn1158]

The BOC cut because we have 2 economies. The real estate market and the rest of the economy. We've already had 5 quarters of contraction and the real estate sector is just sitting there dead. And it's dead because at 13 times wages/income, home prices are completely out in left field. This is following the 1990s exactly and in the 90s int rates dropped and home prices kept dropping with the rate cuts. Why? Because GDI for people is shrinking. People have hit a wall. Back in the 90s this cycle took 7-8 years and I don't see this situation being any different. Going back to what you call normal would be a disaster at this stage. It would result in 10 years of stagflation as people ignore the signs and keep jacking up their leveraging to mortgages. This is the exact reason why Canada is rock bottom in GDP growth. Also add in if developers are shelving projects, that means more layoffs are coming. People on the unemployment lines don't buy houses. I'm expecting a much bigger drop in prices. Volume is low which means nobody is buying at these price levels. The only way to increase volume is to drop prices.

[@quixomega]

Oh boy, the economy must be in really rough shape.

[@PrimePropertiesTO]

Very rough. Just being masked publically atm

[@dirtlump]

NO... the BoC did NOT open the door to "steeper" rate cuts.... only further rate lowering can be expected as appropriate ? Just WTF are you on about ???????????????????????????

[@usamaansari8732]

He explained in the video dude

[@dirtlump]

@@usamaansari8732 By definition 'steeper' rate cuts would imply a faster trajectory in lowering exceeding 25 Bps per meeting.... FORGET any Video presser and peruse the PRINTED release still highlighting data dependence. You may also wish to garner StatsCan and others away from CREA now highlighting some disturbing increases in core/trim cpi metrics contributory to the overnight balances($100B) referenced in the presser(REPO) currently contraindicative past 25 Bps moves moving ahead in the foreseeable. Anywhere remotely close to a 3% BoC rate is NOT happening without significant economic implosion wherein it won't make any difference to Real Estate activity at that point anyways.

[@GreenBeanGreenBean]

Literally what Tiff said in an exact quote

[@aiqueenla2786]

You will expect usd increases and cad decreases, what is the impact? Price increases cost increases , money comes in and then out

[@Lifeisapartydresslikeit]

And people were saying rates were never going to come down 🤣🤣 let me get my popcorn 🍿

[@PrimePropertiesTO]

They were a bit too bearish

[@MR007-r3f]

@@Lifeisapartydresslikeit buy now or never. FOMO Pumper ⛽🙄

[@MR007-r3f]

@@PrimePropertiesTO ⛽🙄

[@Plumber60423]

@@MR007-r3f Landlord - Yes, my advice is to keep renting instead.

[@MR007-r3f]

@@Plumber60423 here's your rent for next twenty four months 💩💩💩.

[@AnitaSridhar]

This is a great time to buy and will be until next summer

[@Lifeisapartydresslikeit]

I think 50 basis points will come next month!! If not, 25 basis points every announcement until March 2025

[@PrimePropertiesTO]

I don't think so. TBD tho. Let's see what the fed does

[@Joe-mz6dc]

Yay! Rate cuts! The economy is dying! We're going into a massive recession! Yay! 🤡

[@ajithantony5674]

Interest rate cut means prices are crashing and further cuts possible only when further price crash happens.

[@Observer168]

Rate cuts means government doesn’t want a crash

[@ajithantony5674]

@@Observer168 It’s the BOC making cuts and not govt

[@Observer168]

@@ajithantony5674 BOC is part of the government. BOC workers are paid by the tax payers.

[@ajithantony5674]

@@Observer168 the BOC governing council is not elected by taxpayers.

[@Observer168]

It’s still a Crown corporation belonging to the federal government

[@gmarks1559]

Time to binge on real estate again, lets gooooooo

[@vert911]

T- 6 months and counting

[@quixomega]

I'd wait for the market lockup to end first. There is no price discovery right now.

[@rondennis3497]

You are dreaming........ is the ski blue in your little world !

[@GreenBeanGreenBean]

Say no to drugs, which you are clearly on

[@ajithantony5674]

Cutting interest rates only possible when prices are crashing

[@pd5482]

This is so stupid, how many stupid real estate agents are there? It will continue to trade sideways at the same mortgage monthly adjusted for rate reductions and that’s how you calculate the price increases

[@AnitaSridhar]

We don’t want it to crazy . It should be a balanced market.

[@AnitaSridhar]

They will bring it down 2.5 to 2.75 .

[@vert911]

any recession will not impact all levels of society equally, at least from a job loss perspective. there is still a lot of multigenerational wealth out there just waiting for rates to come closer to inflation. The poor will lose their jobs, and wont qualify. However, the rich will come out of this guns blazing. There's still enough of these buyers to reignite a smaller version of what we saw previously. At some point investors will see this as a big opportunity (population growth & rental market). I've been saying March 2025 is when this will pop off again.

[@PrimePropertiesTO]

Define pop.

[@baseline6786]

K shape recovery to come in 10 months. Anyone who doesn't own a home have limited time to get in. At some point the rate cuts will stimulate growth in values and if people stop listing their home prices would again be going up fairly quick

[@vert911]

@@PrimePropertiesTO pop = zhen with less time to make YT vids

[@MR007-r3f]

Buy now or never 😂😂😂

[@niftyoptionslivetradingand7231]

Zhennish accent, couldn't get the numbers at all 😂😂

[@brianpereira7483]

2.5 then 6%

[@vert911]

the 6 wont matter if everyone locks in at 3.5 for 5-10 years

[@Lifeisapartydresslikeit]

Exactly! I’ve learned my lesson now. If rates ever go to 2.9 or even 3.1 I’m locking in for the final 10 years of my mortgage. Don’t care!! I have to live somewhere

[@quixomega]

Hopefully not, because that would be really destructive.

[@PrimePropertiesTO]

Lol. Did you know a 10 yr is actually juR a 5+5

[@stevet9652]

WHAT????? Real estate is just about to collapse at least 50% to 80% in about a week

[@kist8102]

Rate cuts rate cuts, buy RE buy RE, lmao we are going to see the mother of capitulation. Seat belts on!

[@SeamusMcFitz-jz9if]

If you can't afford a home then you don't deserve one.

[@PrimePropertiesTO]

Tell that to the people who were sold a false dream.

[@SeamusMcFitz-jz9if]

@@PrimePropertiesTO they need to take responsibility for their own choices.

[@pd5482]

How can you say 3-4%? You literally mark no sense, that would mean prices have decreased because of lowering rates. This is a false video.

[@Dank69410]

To little to late 😂 people are fleeing Canada cause they know it’s cooked

[@madankt]

Problem is getting bigger homes are still unaffordable since the prices are increasing people are still greedy no home is worth this price

[@PrimePropertiesTO]

While true, there are a lot of homeowners in equity rich positiosn to trade upwards.

[@madankt]

@PrimePropertiesTO that is the axiom of all issues including inflation. How can a 300k home jump to 800k in 5 yrs. And 800k home to 1.4 million in 3 yrs...fundamentally it's greed...this country doesn't pay so much or the GDP is not so high due to jobs and opportunities to raise this much. Basically we are all living in a big lie and killing the system slowly and CAN has become an underdeveloped country already in terms of the gap, between the avg income vs prices of home...you are indefinitely indebted to banks here for 40 yrs of amortization which country has something like thag

[@Stealyourgfinance]

​@madankt he's a real estate agent.. perma bull narrative for life

[@ihappeningcommunications8318]

What's the point when Chinese ev is taxed 100%.. I am migrating to Chona... anyone know how yo do that? Or anyone got contact with xi jinnpong... sponsor me to become a proud Commie !

[@Observer168]

Don’t worry, China can just tax all Canadian exports at 100% and play the same game