CBC reports that the U.S. Federal Reserve may cut interest rates by 1/4% tomorrow in light of the fear gripping North America’s financial markets.
So far, we haven’t seen much new speculation on the Bank of Canada cutting its key lending rate. Bloomberg, however, says “a rate cut in the U.S. would put pressure on the Bank of Canada to consider following suit.”
In a statement earlier today, the BoC said, “The Bank will provide liquidity as required to support the stability of the Canadian financial system and the functioning of financial markets.”
In any case, judging from the bond market today, it looks like fixed mortgage rates could be falling soon. 5-year bond yields plummeted 0.16% today, a huge one-day move and the biggest drop this year.