That’s what RBC CEO, Gordon Nixon, told the Globe Friday about interest rates.
More specifically, he said: “They can go lower, but they can’t go much lower.”
Nixon also said a rate cut by the Bank of Canada would hurt RBC’s mortgage earnings. “What it does is squeeze our margins dramatically, particularly in our retail and mortgage portfolios," he said.
Thus far, however, we haven’t seen anything solid to suggest banks won’t lower their prime rates if the BoC does cut.
That should hopefully mean variable-rate mortgagors will be paying 1/4% to 1/2% less interest after Tuesday—assuming economists have predicted correctly.
RBC is Canada’s biggest bank and mortgage lender.