Bank of Canada (BoC) drops their rate by 0.25%, for the second time in a row. Household spending has been weak. There are signs of slack in the labour market. The unemployment rate has risen, job seekers taking longer to find work. Wage growth is showing some signs of moderating, but remains elevated.

Residential investment is expected to grow robustly. With new government limits on admissions of non-permanent residents, population growth should slow in 2025. Shelter price inflation remains high, driven by rent and mortgage interest costs, and is still the biggest contributor to total inflation.

BoC now expects reaching their 2% target next year. They acknowledge however there are opposing forces on inflation, notably shelter and some other services, which are holding inflation up. They will continue to ‘carefully assess’ this.

Next BoC meeting is Sept 4, 2024. US Fed will make their next rate announcement July 31, 2024. The Fed has yet to initiate their first rate drop.