Categories for Bank of Canada

Rate Hikes With This Growth? For Real?

The Bank of Canada maintains that rates are going higher. Meanwhile, it just slashed Canada’s 2019 growth forecast by a not-so-paltry 0.40 percentage points. Does that strike anyone as a mite bit inconsistent? The Bank is now calling for just a 1.7% GDP gain this year. That’s pretty darned feeble. Bonsai trees and glaciers grow faster than 1.7% a year....

Bank of Canada Rate Decision: Doves Fight the Hawk

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...

Bond Yield Massacre

The deluge in yields continues. Canada’s benchmark 5-year yield just hit its lowest point since June. The last time we saw this kind of carnage was January 2015. Back then, the Bank of Canada made emergency rate cuts to stave off the oil crisis. Implied odds are slim that the bank will reverse course and lower its key rate near-term. But...

Bank of Canada: Steady as She Goes?

Fears of a slowing economy take rate hikes off the table, and such concerns definitely took a hike off the table today. Canada’s main rate setter, the Bank of Canada, did what most predicted and left rates as-is at this morning’s rate meeting. But the outlook did change. Here’s more on the BoC’s latest decision, and what it means to...

New Bank of Canada Data on Mortgage Risk

Stricter mortgage rules are working, suggests the Bank of Canada in this report today. Now if only we could take that report at face value. New Stats on Mortgagor Debt Loads If the government wanted to slow the market, it did. As of the second quarter, the number of new low-ratio mortgages fell 15% year-over-year after the feds implemented the...

Next Stop for Rates is “Neutral,” Says Poloz

“[Canada’s] policy rate will need to rise to neutral to achieve our inflation target.” That was the headline-making quote yesterday from Bank of Canada boss Stephen Poloz. Speaking in front of the parliamentary finance committee, he repeated what the BoC’s been saying for over a year: “Our estimate of neutral is in a range—currently 2 ½ to 3 ½ per cent....

There They Go Again. BoC Hikes Rates 1/4 Point

If you’re carrying floating-rate debt, the rate lords at the Bank of Canada have just added to your interest burden. Here’s what the BoC just did and what it means to your wallet: Rate Decision: Canada’s key interest rate rose 25 bps today Prime Rate: Should climb to 3.95% within the week Market Rate Outlook: 3 more hikes by year-end 2019 (as of...

The Bank of Canada Resists Another Hike…For Now

The Bank of Canada has issued its latest rate verdict. Here’s a breakdown of today’s announcement: Rate Decision: No change to the overnight rate Prime Rate: Also no change. Prime remains at 3.70% Market Rate Outlook: One more hike this year plus two more hikes next year. The market is not fully pricing in the next BoC rate increase until December. BoC’s...

Prime Rate is Going North (Again)

If low rates are a yard party, the Bank of Canada has just turned up the lawn sprinklers. Here’s a rundown of what they just did: Rate Decision: They increased the overnight rate 25 bps Prime Rate: Should jump to 3.70% this week Market Rate Outlook: 2+ more hikes by year-end 2019 BoC GDP Outlook: “Average growth of close to 2% over 2018-2020″...

The Bank of Canada May Do You a Favour

The market is betting on rates heading higher this Wednesday. That’s bad news for mortgage shoppers. Or is it? One could argue that a rate hike on July 11 makes the fixed or variable rate decision even easier. Essentially the Bank of Canada is doing mortgage shoppers a favour. Here’s why… Closer to the Finish The higher rates go, the...