What’s the Logic Behind the Bank of Canada’s 5% Decision?

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On this episode today, we'll take the take a look at the Bank of Canada's decision to maintain its overnight rate at 5%, unpacking the essential elements behind this decision and its implications for the economy.

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Equifax reports concerning patterns in consumer debt, particularly in Ontario and British Columbia.
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⚖ 2 legal fights dealt with by Apple, consisting of a substantial fine enforced by the European Union and a settlement in a class-action claim concerning the purposeful slowing down of older iPhone designs.

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What's the Logic Behind the Bank of Canada's 5% Decision?

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About the Author: Richard Money


    1. Lower rates let’s you increase margin making more money to inflate returns. Media speaks for big business not people. Last we need now is for people to increase the margin on there homes.

    1. I think more people should buy Apple products. A MacBook pro, an iPad and iPhone, vision pro. They are great products and doesn’t matter the price, use Apple finance, credit cards, loans. It’s totally worth it. Everyone should also get the iCloud subscription too. 5gb is too little.

    2. Let your wife and kids make their own decisions. Don’t control their choice of phone. That’s controlling

  1. Rates are NOT going anywhere, and certainly NOT significantly lower in the foreseeable… NOT Happening !
    It’s really simple…. after 10+ years of a low rate fueled Real Estate DEBT instrument expansion to a now unsustainable ~$3+ Trillion…. we now face a debasement based cpi inflation metric just below the surface….. that intends rates MUST remain elevated into demand destruction/severe recession and painful deleveraging cycle.
    There is NO ‘re-inflating’ the bubble…. that is now impossible !
    “DEBT” expansion based economic activity for 10+ years to a barely ~$2 Trillion GDP…. much of THAT stagnant GDP now Debt instrument reliant…. is NOT sustainable GDP because sooner or later as we have now… you run out of future “capacity” with which to service any further DEBT expansion in the immediate… and it begins pulling from future ‘currency’ valuations = debasement !

    1. You never discount the vagaries of the politicians, it is an election year in the US, and the administration will pull all stops to maintain the crazy highs in the markets, and give what people want, a reduction in interest, perhaps it will only be temporary.
      One item I read recently is the US debt is growing by $1 Trillion every 100 days, totally unsustainable, and much of it is for debt servicing.
      Canada is probably in the same boat in percentage terms

  2. Biggest reason is to maintain the relative value vs the US dollar.
    Once the US starts lowering its rates, then Canada will follow.

  3. I wonder if blockchain can be used to verify authentic sites…I know nothing about blockchain, except that it will ‘solve all our problems’.

  4. Forclosures and bankruptcy will double every year if they don’t lower rates soon. Peoples lives are in danger why is it taking so long this is a bad sign for Canada…

    1. That’s central Banks’s plan. If market able to create high pay jobs,more earning opportunities, less gov money laundering & cut taxes then inflation should be slow down to their target by 2025

  5. Do you actually take the CPI at face value? I prefer to call it thr CPLie, real inflation is more like 5-6% using 1980s model

  6. During the COVID-19 pandemic, the Bank of Canada (BOC) significantly increased the money supply. This led to an unprecedented situation where many Canadians amassed substantial savings for the first time. Deputy Prime Minister Chrystia Freeland highlighted this phenomenon in a press conference, noting that Canadians had accumulated a considerable amount of savings. Consequently, as people began to spend these savings, it contributed to inflationary pressures, mirroring trends observed globally, with some countries faring better than others. To counteract this, the government now faces the challenge of withdrawing this excess money from people’s bank accounts. One effective method is to increase payments, effectively removing money from circulation. The BOC’s strategy of maintaining high interest rates is designed to prevent people from accumulating too much savings, thus ensuring a paycheck-to-paycheck economy. This approach stems from a concern that if Canadians save too much, they may choose to leave the country in search of better opportunities elsewhere. This longstanding issue is one reason why Canada continues to increase immigration levels, as many people tend to emigrate at their first opportunity in search of warmer climates.

  7. The fast way to fix housing pricing is to eliminate amortization in lending. You have 5 years to pay the loan or you dont get it.

    1. You aren’t talking from your brain but from your heart. Why people in Western countries are living in good conditions and able to buy home. If lending become tough then average people will remain very poor.

    2. @@Hazara26 People in the west are poor because they are borrowing money and paying for stuff they can’t afford. To reduce prices reduce demand. The huge wealth growth in the past was due to people not borrowing massive amounts of money to buy stuff.

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