Written by Amy Legate-Wolfe at The Motley Fool Canada
The key interest rate has fallen. Canadians were thrilled this week to learn that the Bank of Canada made its first rate cut in over four years. This brought the interest rate down to 4.75% from 5%, and more are likely lining up for the summer.
This can be great news for Canadian banks. While higher interest rates mean the companies can charge more, it also means there is less investment and loans. Now, with more consumer confidence, these two Canadian banks are likely up to bat for an increase over the next few quarters.
CIBC stock
First up, Canadian Imperial Bank of Commerce (TSX:CM) is likely to see another pop in share price among bank stocks. Especially with a lower key interest rate. And this comes down to a variety of factors.
Lower interest rates typically lead to increased demand for mortgages as borrowing becomes cheaper. CIBC, as a major mortgage…
