The Bank of Canada says it has room for another rate cut at its next March 3 meeting.
Governor Mark Carney said today: “There is further one could move if we saw fit.”
Scotia economist Derek Holt says the market is expecting a 1/2% cut, but that is far from certain. More conservative commentators are predicting 1/4%.
On the other hand, Carney said our economy will bounce back sooner than many expect. In fact, the BoC projects GDP to rebound at its fastest pace in two decades (3.8%) in 2010. (There are caveats to this says the Post’s Don Martin. His story)
When challenged on his optimistic projections, Mr. Carney said, “We don’t do optimism, we don’t do pessimism. We do realism at the Bank of Canada. We don’t do spin.”
Carney feels the U.S. stimulus package will provide “stabilization” to the North American economy by late this year, or 2010.
The 5-year bond yield is holding steady on this news and is currently trading at 2.00%.
___________________________________________________
Sidebar: Despite the horrendous unemployment figures we’ve seen lately, bond expert, Hank Cunningham, says: “Oddly, the bond market has barely moved, signaling the market’s caution towards the coming tsunami of new government debt.”
New supply, a massive 3-month bond rally through January, and positive economic forecasts? Some would say that sounds like a recipe for higher yields.
Last modified: April 29, 2014
Likely a 1/4 % rate-cut in March followed by another 1/4 % cut in 2-3 months.
are you serious? My variable rate mortgage is 2.24% right now.. under 2%???? that would be amazing
I’m at 2.05% right now, based, in large part, on the variable mortgage research that I came across on CMT. A lot of it is luck, but you can’t win if you don’t play the game. ;)
Feeling very good about things, obviously. Where did all the people who were posting about the inherent superiority of fixed rates go? I haven’t heard from many lately – LOL.
Al R
Al R,
While you’re right about variable mortgages signed 6 months ago, I would argue that now fixed rates are the way to go. As little as 0.5% premium to lock your rate for 5 years sounds pretty good, time will tell though.
I don’t necessarily disagree, but the choice was pretty clear in November 2007. The fact that my ING Savings account is paying out higher interest than I am to the bank is crazy.