Perspectives

The long-awaited interest rate cut has arrived — now what?

Jun 5, 2024

Scotiabank’s Chief Economist Jean-François Perrault discusses the Bank of Canada's interest rate cut, its impact on the housing market and the economy, and future rate expectations. Key topics include reasons for the cut, inflation targets, effects on Canadians, future rate adjustments, and indicators for future cuts.

10:08

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Episode guests

Jean-François Perrault

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Quick takeaways

The Bank of Canada's interest rate cut provides relief to variable-mortgage holders and aims to stimulate the economy.

The decision to cut interest rates signifies a positive economic outlook and potential for future reductions to benefit Canadians.

Deep dives

Bank of Canada announces first interest rate cut since March 2020

The governing council has decided to lower the policy rate by 25 basis points to four and three-quarters percent, marking the first interest rate cut since March 2020. The rate cut is a welcome surprise for many, providing relief from higher interest rates that have burdened Canadians. The decision was influenced by factors such as lower-than-expected first-quarter growth and decreasing inflation levels, signaling the start of a gradual process of cutting interest rates to stimulate the economy.

Intro

2min

Analyzing the Bank of Canada's interest rate cut decision and its implications

2min

Analysis of the recent interest rate cut and its implications for Canadians

2min

Economic Outlook and Impact of Interest Rate Cuts

2min

Analyzing the recent interest rate cut and its implications for Canadians

2min

The Bank of Canada has cut its key interest rate for the first time in more than four years, marking a pivot in its long fight to tamp down inflation. After a quarter-percentage-point cut, the central bank’s benchmark rate now sits at 4.75% — welcome relief for variable-mortgage holders, businesses and others feeling the pinch of higher interest rates.

Scotiabank’s Chief Economist Jean-François Perrault is back to discuss the central bank’s decision to cut, what this means for Canada’s housing market and the broader economy, and what Canadians can expect in the months ahead.

For an up-to-date breakdown of the Bank of Canada's key interest rate and its change over time alongside inflation numbers, visit our interest rate page.

Key moments this episode:

1:21 – JF's initial take on the central bank’s decision to cut its key rate

1:50 – Why did the Bank of Canada decide to cut today?

2:31 – Will inflation get back down to the Bank of Canada’s target?

3:45 – What does this cut mean for Canadians? How will they feel the difference?

5:00 – How many more cuts can we expect this year? How fast or slow will this process be?

5:45 – What can we expect to see next year based on this latest cut?

6:15 – Is this the ‘soft landing’ we’ve been hoping for?

7:45 – What are the indicators that Canadians should be looking for to tell us the path ahead for future cuts?

8:43 – The three key takeaways for Canadians from this latest decision

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Perspectives

The long-awaited interest rate cut has arrived — now what?

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Bank of Canada announces first interest rate cut since March 2020

Implications of the rate cut for Canadians and future rate cuts

Outlook on the economy and potential impact of future rate cuts

Remember Everything You Learn from Podcasts