The Bank of Canada left its overnight lending rate unchanged which many had anticipated. It is unlikely that the Bank of Canada will increase the rate until the end of the year, or even next spring, with too much uncertainty in the air.
Japan is going to see severe impacts to its economic output this year, and as a result that will have a ripple affect due to supply chains that rely on Japanese parts.
Europe isn’t without its challenges along with the USA, who will likely see another 3 million homes hit the foreclosure market in the next 18 months. The US Fed won’t be moving their rates anytime soon, which leads me to believe the Bank of Canada’s hands are tied. We can’t afford to have our Loonie increase in value compared to the US dollar, which is what an increase in the Bank Rate would facilitate. A higher exchange rate makes it harder for us to sell our exports south of the border...
Interestingly, the Bank predicts core inflation to track under it’s target of 2%, which is another reason why the Bank Rate can stay put for a while. Total inflation has some people scared, hence the rise in Bond Yields (and fixed mortgage rates as a result) but I would let that scare me out of my variable rate mortgage. Every time we get good news the bond yields jump, and every time we get negative news they drop. Expect this trend to continue and as a result fixed rates will track close to 4.1% for the next 6 months.
Please feel free to contact us if you are thinking of buying property or refinancing your mortgage. We’ve got the experience and knowledge that can help save you thousands.
Warm regards,
Chris
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Christopher Bisson
The Mortgage Centre
Toll-free: 866-838-4366 x1003
www.mortgageconcierge.ca
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