The Bank of Canada’s rate announcements have sounded pretty similar for the last 8 months: no change, no change, no change…
Well, today they met again, and guess what? No change.
The Bank left Canada’s key lending rate at a record low 0.25%. That’s been the rate since April 21 of last year.
In today’s report it said:
- “Conditional on the outlook for inflation, the target overnight rate can be expected to remain at its current level until the end of the second quarter of 2010.”
- “The global economic recovery is under way.”
- The economy should return “to full capacity” with inflation returning “to the 2% target in the third quarter of 2011.”
- “The Bank projects that the economy will grow by 2.9% in 2010 and 3.5% in 2011.” (an increase versus its prior forecast)
The next BoC meeting is March 2.
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In Other News…
- Canada’s leading indicators posted their biggest gain in 27 years in December—up 1.5% month-over-month. Economists had expected a rise of just 1.0%. It tied February 1983 for the largest gain in over 50 years. More from StatsCan…
- Government bond yields are flat and today’s news should have little effect on mortgage rates in the short-term.
Has anyone been able to find a Canadian Mortgage History chart since 1991 (when the BoC adopted inflation targeting?). I’m trying to find the average Prime since then.
I can only seem to find charts that only go back 10 years or those go back to the 30’s and include non-inflation targeting era.
Hi Bob,
This might help: Variable-Rate Mortgage Payments – Since 1991
Cheers,
Rob
Thanks to weak inflation data released today, bond yields are down sharply!
The two-year yield, at 1.19%, is only 10 bps above its recent November low …
The five-year yield is also down to the 2.50’s, do you guys think fixed mortgage rates may be on the way down this week?
Fixed or variable…the question remains…we’ve always had a fixed mortgage but just once we want to try the variable. Have we waited too long to try it on for size?
No rate hikes for another 18 months! Woohoo! Enjoying a 2% variable for that long should be worth it.
http://network.nationalpost.com/np/blogs/fpposted/archive/2010/01/20/bank-of-canada-tightening-won-t-begin-until-mid-2011-at-the-earliest-david-rosenberg-advises-clients.aspx
double dip recession is not only a possibility but actually looking more and more likely in the US. Demand is simply not there. And guess what, if the US goes back into recession, then Canada will likely follow suit. All the hype about interest rates rising this year will remain just that – hype. I dont see any rate increases for 12 to 18 months yet – IF you are lucky and we actually get a bit of a recovery. So far the recovery is pitiful at best.
There are a lot of possibilities and things can change quickly. No one knows what will happen in 3 months let alone 18.
Al Said – “I dont see any rate increases for 12 to 18 months yet.”
So much for your credibility eh buddy? LOL