Bank of Canada Maintains Key Rate at 2.75%
On June 4, 2025, the Bank of Canada announced it would keep its overnight lending rate at 2.75%, marking the second straight month without a change. While inflation appears to be easing and early-year economic growth exceeded expectations, uncertainty remains a key theme.
📉 Why the Rate Hold Matters
Despite GDP growth in Q1 and a slowdown in Canada’s Consumer Price Index (CPI) to 1.7% in April, concerns persist. Ongoing trade disputes with the U.S., combined with a weakened labour market (unemployment now at 6.9%), create a cautious economic backdrop.
“Uncertainty remains high,” said Governor Tiff Macklem. “The economy is softer, but not sharply weaker.”
Businesses across the country are already adjusting, facing higher costs due to supply chain disruptions and efforts to enter new markets.
🏠 Impact on Montreal Real Estate
With the rate remaining stable, there’s some breathing room for buyers and sellers in the real estate market—especially those with variable-rate mortgages.
However, real estate activity has cooled, with national home sales dropping 0.1% from March to April. In cities like Montreal, where inventory is slowly increasing, buyers now have more options and less competition—a rare balance in recent years.
If you’re planning to buy, this could be a strategic window to enter the market with more clarity on borrowing costs.
📅 What’s Next?
The next interest rate decision from the Bank of Canada will take place on Wednesday, July 30, 2025. Until then, market watchers will keep a close eye on inflation data, employment figures, and updates on U.S.-Canada trade relations.
💬 Need Expert Guidance?
In uncertain times, having a trusted real estate expert on your side can make all the difference.
Whether you’re planning to buy or sell in Montreal, reach out to discuss how today’s market conditions could affect your goals.
📞 Call Bianca at 514-659-0881
📧 Email: bianca@biancamusto.com