Bank of Canada Cuts Interest Rate to 3.25%

The Bank of Canada has reduced its key interest rate by 50 basis points to 3.25%, marking the fifth consecutive cut aimed at easing economic pressures and aligning with its inflation target of 2%. While the central bank has implemented significant rate cuts, it now signals a shift towards a more cautious approach, indicating future reductions will likely be smaller and evaluated on a case-by-case basis. Experts predict that the era of large cuts may be over, with expectations for 25 basis point reductions moving forward as the bank assesses economic conditions. The real estate market is expected to benefit from these lower rates, making housing more affordable and potentially boosting market activity. However, concerns remain about future home supply in the Greater Toronto Area, where projections highlight a looming shortage of new homes. Overall, the central bank's strategy reflects a careful balance between stimulating growth and maintaining inflation targets.