Rising-rate environment has contributed to an uncertain outlook
Canadians are much more careful about their investment decisions as they anticipate possible rate cuts by the Bank of Canada in 2024, according to CWB Financial Group chief executive officer Chris Fowler.
Speaking with BNN Bloomberg, Fowler said the bank has seen a trend of more credits being paid down with less debt now being taken on by its customers. He said that the current rate environment seemed to be in a state of push and pull.
“I think they definitely gave signs in the last announcement last week that they see the economy not being overheated,” said Fowler. “They’re seeing some excess supply.”
The Bank of Canada recently announced its decision to hold its target for the overnight rate at 5% and that it will be continuing its quantitative tightening.
While its last four decisions on its benchmark interest rate have seen no change, it embarked on an aggressive series of rate hikes from March 2022 onwards as it bid to bring down inflation and cool what it viewed as an overheated Canadian economy.
With the Bank’s next scheduled overnight rate announcement set to take place in March, Fowler said the central bank was likely focused on maintaining its view regarding the trajectory of inflation and where it might be headed.
“I think we’ve had some optimism in the markets of anticipating the rates to come down sooner, so we’ll see where they go,” said Fowler. “We are seeing that the economy [will] be slower than it was.”
