As of today, posted fixed rates should start coming down a bit.
Canada’s biggest bank, RBC, announced yesterday that they were chopping their fixed rates 0.20% to 0.30%.
Most of the other big banks will likely form their usual line and follow.
The cuts were driven largely by falling bond yields. Yields have lately found gravity again thanks to diminishing inflation threats.
RBC’s benchmark 5-year fixed rate is now 6.85%. Their “special offer” 5-year fixed rate is 5.79%. As usual, broker rates are still a fair bit lower.
It’s eternally fascinating to watch how fast rates can change in Canada’s multi-billion dollar credit market. In hindsight, today’s cuts make June’s big 1/2-point fixed-rate hike look like a short-term blip.
Sometimes all it takes is just one or two economic reports to throw things in reverse.
Do you see rates coming down more or going up within the next year?
Hi Ryan, Thanks for the note. We try to avoid predicting rates because it’s statistically futile. However, economists will try anyway, and most of them feel rates will be higher in 2009. Although recent reports have had some speculating on a rate cut before then.
See this CEP story