Fixed-rates should hopefully fall soon as well given that 5-year bond yields are at a new 2-year low of 3.66%.
The Bank’s reasons for cutting rates included subprime-related “difficulties,” weakening exports, and lower than expected inflation.
The BoC gave few hints of it’s next move, to be announced at its January 22, 2008 rate meeting. However, they did say “there has been a shift to the downside in the balance of risks” to inflation through 2009.
Lower inflation typically means lower interest rates.