🧨 “Mission Impossible”: The BoC’s Balancing Act

This week’s Toronto Star headline couldn’t say it better—Bank of Canada Governor Tiff Macklem is in a tough spot. The central bank has a dual challenge:

• Inflation pressures are creeping back up

• A potential tariff-induced economic slowdown is looming

Tariffs from the U.S., slower global trade, and weak business confidence are starting to take a toll. While GDP grew 2.2% in Q1, experts say that was likely driven by businesses rushing to beat the tariffs. Things could slow sharply in the months ahead.

Some economists believe the Bank should resume rate cuts now to protect the economy. Others caution that cutting too soon could reignite inflation.

So what does this mean for you?

If You Have a Variable Rate:

Hold steady.
There are no signs of a variable rate increase in the short term. And if the Bank of Canada cuts rates in July—as some economists predict—you could see some payment relief.

Should You Lock into a Fixed Rate Now?

Probably not. Fixed rates have recently gone up, so locking in today could mean capturing a peak—then missing out if rates fall later this summer.

A Smarter Strategy:

Wait until July–August.
If the BoC cuts rates and bond yields ease, we could see more competitive fixed rates again.

Watch for bond yields dropping below 2.7%—that’s often a signal fixed rates will follow.

So, When Should You Lock In?

Only if:

• You need predictable payments

• You’re very risk-averse

• Or you believe inflation could spike again

Have questions? I’m always here to help you navigate the right move.

DM me or book a quick call.