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Why Interest Rates Matter for Canadians

Interest rates are the single most powerful lever in Canada's economy.  When the Bank of Canada adjusts its policy rate, the effects reach every household—from the cost of carrying a mortgage to the return on a savings account. With rates currently at 2.25% and significant uncertainty ahead, understanding how rates work has never been more important for your finances. What Is the Bank of Canada's Policy Rate? The Bank of Canada sets the overnight policy rate—the interest rate at which major banks lend money to each other. This rate serves as a benchmark that influences borrowing and lending costs across the entire economy. When the Bank raises or lowers this rate, commercial banks adjust their prime rates accordingly, which directly affects the rates you pay on mortgages, lines of credit, and other loans. The Bank's primary goal is to keep inflation near its 2% target. When inflation runs too hot, the Bank raises rates to cool spending. When the economy slows, it cuts rates...
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Black Friday shoppers pulling back on spending

 

 According to a survey by the National Retail Federation, Black Friday sales in the U.S. dropped by 28% compared to 2019, as shoppers avoided crowded stores and opted for online shopping instead.

Here ate the main reasons cited for this trend:

  • Online shopping surge: Online sales on Black Friday reached a record $9 billion, up 21.6% from last year, according to Adobe Analytics. Cyber Monday is expected to be the biggest online shopping day in U.S. history, with sales projected to reach $10.8 billion.
  • Pandemic impact: The coronavirus pandemic has changed consumer behavior and preferences, as people seek convenience, safety, and value. Many retailers have extended their sales period and offered curbside pickup or free delivery options to attract customers.
  • Holiday season outlook: Despite the lower turnout on Black Friday, the NRF predicts that overall holiday sales will increase by 3.6% to 5.2% over 2019, reaching between $755.3 billion and $766.7 billion. However, the uncertainty around the pandemic and the economy could affect consumer confidence and spending.
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