Canadian mortgage rates take their cues from many things, and U.S. monetary policy is near the top of the list. That’s why today’s Fed rate cut—the first since the financial crisis—is meaningful to borrowers. Fed decisions always move Canadian rates in some respect but in this case, key questions remain. Here are the two biggest ones. How Many Cuts Are...
In 18 days the Fed is expected to do what it’s virtually never done: inflate the U.S. economy with a rate cut — despite 50-year lows in unemployment and record highs in stocks. Some argue the Fed is dangerously veering off its normal course, that Trump’s browbeating of Powell is working. The risk is clear: more inflation. And inflation is...
The Bank of Canada’s decision to leave rates alone was far from its most important message today. More on that to follow, but first, here’s a quick take on what the BoC said this morning: Rate Decision:It left Canada’s key interest rate at 1.75% Prime Rate: Prime rate remains at 3.95% Market Rate Forecast: At least one rate cut by...
The gap between the best 5-year fixed rates and best variable rates is the smallest its been in two and a half years. We’re talking less than 1/8th of a percentage point between them. Depending on the equity a borrower has, folks can even find 5-year fixed rates that are below the best variable rates. What’s Provoking It One reason...
Quick news nuggets from Canada’s mortgage rate market: Not only has the yield curve inverted, but in some cases the mortgage rate curve has inverted. Among uninsured mortgages available in multiple provinces, for example, thebest 5-year fixed rateis now belowthebest variable rate. There’s still tremendous value in insured variable rates—now effectively as low as 2.54% in some provinces. Markets are...
No one thought the Bank of Canada would move rates today. What observers were looking for was a hint that we may be closer to the end of rate hikes than Governor Poloz has been letting on. Here’s what we heard from the BoC on that point, among other things: Rate Decision: Canada’s key interest rate remains at 1.75% Prime...
Bank of Canada Governor Stephen Poloz dropped some notable rate-related nuggets in a speech Thursday. Below we ponder the implications of those comments for mortgagors. Here’s what Poloz said: ****** “Inflation expectations have become firmly anchored on our 2 percent target…My children will never pay anything like the kind of interest rates I have paid in my lifetime.” Translation for...
The talk of the market this month is how traders are pricing in a decelerating economy and lower interest rates — to which Scotiabank Economics replies, think again. December’s selloffs in oil and equities and incessant chatter about yield curve inversion got many thinking we’re headed towards a rate cut by 2020. But in a recent report, Scotia challenged that...
The market knew we wouldn’t get a rate hike today. Instead, it was scouring the Bank of Canada’s messaging for guidance on where rates are headed. And the market found it. The bank’s statement this morning reinforced that it expects higher rates, but it will take longer than they thought. Here’s more on the BoC’s latest decision, and what it...
The smart guys betting billions of dollars on interest rates are pulling back their wagers on 2019 rate hikes. (More on that, if you’re interested.) And if you believe those traders, the end of the current rate-tightening cycle may not be far off. The market is now pricing in just two more U.S. rate increases between now and the end...
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