Recession News in Canada, Are Rate Hikes off the Table?

Canada officially slipped into a technical recession today after economic growth stalled in the first quarter.

So what does this actually mean for interest rates?

The central bank makes scheduled rate announcements. The next date is June 10, 2026

While markets are still predicting the Bank of Canada will raise interest rates before the end of the year, BMO chief economist Douglas Porter says, today's bad GDP news should make that less likely.

"Even if we determine that this is just a recession in name only, the fact that we have seen declines in GDP in three of the past four quarters I think washes away any argument for rate hikes," Porter said.

Economists are now watching closely to see whether slowing growth could eventually lead to rate cuts if economic conditions continue to soften.

As a general rule, when interest rates rise, house prices tend to soften as borrowing becomes more expensive. When interest rates fall, house prices often increase as buyers have greater purchasing power and affordability improves. While many factors influence the market, interest rates are one of the key drivers of housing demand and pricing trends. For homeowners, buyers, and anyone watching mortgage rates, this is definitely something to keep an eye on over the coming months.

Read the full article here:
https://www.cbc.ca/news/business/recession-gdp-may-2026-statscan-9.7216352

Source: Abby Hughes · CBC News