Some optimism to those borrowing from the banks for variable rate mortgages, credit lines, and other loans Wednesday, as the Bank of Canada dropped their key interest rate by 25 basis points, down to 4.75 percent.
Reagan Gale of Pinkney Financial was on Fort McMurray Matters on Play 103.7 on Wednesday and says this is the first rate cut in more than four years.
“While it’s a small decrease, it is a small step in the right direction,” Gale said. “I think it really increases optimism, investor sentiment, how we really feel about the market, and it tends to pick things up a little bit.”
Gale says it was a matter of time before this announcement was made.
“This really does follow with the information we’ve been given over the last few years, this was part of the plan, and we’ve really been doing what we’ve had to do,” Gale said. “Inflation fell to 2.7% in April, their goal is to have us within 1.3%, so they really couldn’t put this off any longer.”
Gale adds she believes there’s ‘about a 60 percent chance’ of another rate cut later this year, but it won’t be very big if it does happen.
