Tag Archive: rate forecasts


Bank of Canada Rate Decision: Nearing the End

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...

Analyzing Poloz’s Latest Rate Clues

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...

Canada Will See Higher Rates Before Lower Rates: Scotia

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...

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...

The Market Tempers its Rate Hike Bets

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...

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....

Mortgage Rates. The Day of Reckoning

“You better be prepared to deal with rates 5% or higher. It’s a higher probability than most people think” —JP Morgan CEO, Jamie Dimon What if interest rates surged far higher and faster than you now envision? Picture this scenario for a moment: U.S. core price inflation above 3% for the first time since 1995 U.S. unemployment at 60-year lows...

Canadians Can’t Predict Interest Rates. But They Try.

Two-thirds of consumers expect interest rates to rise in the next 12 months, according to a new report from Mortgage Professionals Canada. Only a measly 2% expect rates to fall. But that’s not as surprising as it seems. There is a built-in bias towards higher rates and there has been for years. “Through the entire history of this question, Canadians...

Canada’s “Neutral Rate” in Perspective

The “neutral rate” has taken on a life of its own. The Bank of Canada is talking about it, analysts are talking about it, the media is talking about it and everyday mortgagors are talking about it. Millions of Canadians, us included, use it as reference when trying to estimate how high rates might go. But the neutral rate is...

How a Trade War Could Hold Rates Down

“We cannot withstand a trade war with the United States” – Rona Ambrose. When over 70% of your exports go to one country, and that country’s representatives say, “There’s a special place in hell,” for your Prime Minister, that’s a problem. This is what the state of relations has come to between two of the world’s closest allies. Given Trump’s tendency to...