Key facts
- The Bank of Canada maintained its key policy rate at 2.25%.
- Governor Tiff Macklem indicated readiness to raise borrowing costs multiple times if inflation remains high.
- Greater Toronto Area home sales decreased 1.3% in August from July.
- The Greater Toronto Area home price index fell 0.1% month-over-month in August.
- U.S. imposed new 50% tariffs on $20 billion of Canadian imports.
The Bank of Canada maintained its key policy rate at 2.25% on Wednesday, but Governor Tiff Macklem indicated that policymakers were prepared to raise borrowing costs multiple times if inflation remained too high. This decision comes as Greater Toronto Area home sales fell in August for the first time in six months, with concerns about trade with the United States and the potential for higher borrowing costs deterring some buyers.
Seasonally adjusted sales decreased 1.3% in August from July to 5,484 units. The board's home price index was down 0.1% month-over-month, after seasonal adjustment, to C$931,200. On a year-over-year basis, home sales fell 2.1%, while new listings declined 14.1% and the price index was down 4.5%.
The U.S. imposed new 50% tariffs on $20 billion of Canadian imports last month after trade talks collapsed. The Bank of Canada's decision to hold rates was influenced by these trade risks, alongside inflation concerns.