Bank of Canada Slashes Interest Rates for Seventh Time in 2024

The Bank of Canada has lowered interest rates for the seventh time this year bringing the benchmark to its lowest since 2022 in a bid to spur economic growth. This latest cut reflects ongoing worries about sluggish consumer spending and a cooling housing market in the face of global trade strains. Governor Tiff Macklem signaled more relief may come as the bank balances inflation control with job creation needs.

The rate now sits at 2.75 percent after a series of reductions starting in June aimed at easing borrowing costs for households and businesses. Analysts say persistent cuts stem from weaker-than-expected GDP growth and a softening labor market hit by U.S. tariffs. Canadians welcome cheaper loans but fret over rising debt levels as relief comes slow.

Macklem noted inflation has hovered near the 2 percent target giving the bank room to act decisively this year. He tied the moves to global uncertainty including Trump’s trade policies rattling Canada’s export-driven economy. The governor stressed supporting workers and small firms as core to these aggressive steps.

Homeowners cheer lower mortgage rates with some seeing monthly payments drop by hundreds of dollars since summer. Yet real estate experts warn the market remains tepid with high prices still locking out first-time buyers. Renters see little gain as landlords hold firm despite the bank’s efforts to juice spending.

Businesses borrowing to expand applaud the cuts though trade barriers with the U.S. cloud their outlook. Manufacturers in Ontario and Quebec report orders dipping as tariffs bite into profits. The bank hopes cheaper credit offsets these woes but admits global forces may blunt its impact.

Critics argue the seven cuts risk overheating an economy already saddled with household debt topping 180 percent of income. They warn of a bubble if rates stay too low too long especially with housing still unaffordable for many. Supporters counter that inaction would choke recovery leaving workers in the lurch.

The U.S. Federal Reserve’s slower pace has widened the rate gap raising fears of a weaker Canadian dollar driving up import costs. Economists predict at least two more cuts by mid-2025 if trade tensions persist. For now families and firms lean on this lifeline as Canada navigates choppy waters.

This string of reductions marks the bank’s boldest run since the pandemic aiming to shield jobs and growth from external shocks. Macklem’s team faces pressure to keep inflation tame while lifting a nation wary of debt and trade wars. The seventh cut signals resolve but leaves questions on how far relief can stretch.