Rates appear to be headed lower. Bank of Canada chief Mark Carney had a press conference and speech earlier today. He's a sample of what he said:
"Further monetary stimulus will likely be needed"
- "Recession is a possibility for Canada." (consumer confidence is at its lowest since 1982)
- "We do see growth picking up in the second half of 2009."
BoC Deputy Governor Paul Jenkins concurred with Carney's rate outlook earlier this week when he said: "Some further monetary stimulus will likely be required to achieve our 2 percent inflation target over the medium term.''
Here's how the credit markets have responded:
- According to CEP, credit swap traders are "pricing in" a 100% chance of a 0.25% cut, and a 98% chance of a 0.50% cut by year-end.
- TD Securities expects a 1/2% rate cut on December 9
- Bloomberg says CIBC economist Avery Shenfeld believes "Carney may ease to 1.75% (from 2.25%) at his next decision on Dec. 9."
- 30-day bankers' acceptance rates (which sometimes lead prime rate changes) are now at 2.46%, down from:
- 2.52% on October 21 (the date of the BoC's last 1/4% rate cut); and,
- 3.05% on October 8 (the date of the BoC's previous 1/2% rate cut)
- The 5-year bond yield (which correlates with fixed mortgage rates) is now at 2.64%, down from 2.84% on October 21.
The Bank of Canada's next interest rate meeting is 20 days away.
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