Bank of Canada lowers key interest rate again; more cuts 'reasonable' if inflation continues to decline

The Bank of Canada cut its key interest rate to 4.5%, the second consecutive reduction, with further cuts possible if inflation continues to ease. This move follows a decrease to 4.75% in June, ending a series of hikes since April 2022 to curb high inflation. June's inflation rate of 2.7% prompted this decision despite earlier doubts.
Lower rates are expected to benefit consumers by reducing interest on credit cards and variable mortgages. Governor Tiff Macklem emphasized that future rate decisions depend on ongoing economic conditions and inflation trends.
Prospective homeowners are optimistic about the impact of lower rates. Still, Deputy Governor Carolyn Rogers cautioned against relying solely on interest rates to improve housing market conditions, citing rising rents and other costs. The next rate decision is set for September 4.