At long last, an interest rate cut. What comes next?

The Bank of Canada is shown in Ottawa on July 12, 2022. THE CANADIAN PRESS/Sean Kilpatrick

By Analysis by The Big Story podcast

Posted June 6, 2024 4:22 am.

In today’s The Big Story podcast, on Wednesday, the Bank of Canada lowered its key interest rate for the first time in four years after months spent at a 20-plus year high. The cut was just a quarter-point, but it could be a signal that easier economic times are on the way for millions of Canadians struggling with servicing their debt.

David Macdonald is a senior economist for the Canadian Centre for Policy Alternatives‘ National Office. “We think of the Bank of Canada as fine-tuning the economy, and this type of language makes it into Bank of Canada communications. In reality, monetary policy has huge lags,” Macdonald said.

So, what does this latest cut mean right now, and what might it mean in the future? And is this the start of a trend, or could the bank decide to walk it back later this year?

You can subscribe to The Big Story podcast on Apple Podcasts, Google and Spotify. You can also find it at thebigstorypodcast.ca.
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