Bond yields are back on the rise this week, which observers say could keep upward pressure on fixed mortgage rates if the trend continues.
CIBC's Benjamin Tal says that the Bank of Canada has chosen to err on the side of too many hikes rather than too few for one simple reason: its bias towards fighting inflation.
Canada's headline inflation reading took another step towards the magic 2% figure by slowing to an annual rate of 2.8% in June.
Variable-rate mortgage borrowers, who have already seen their interest costs rise by more than 70% over the past year, were hit with yet another hike last week as prime rate reached a 22-year high of 7.20%.
As was widely expected, the Bank of Canada today delivered another quarter-point rate hike today, bringing its benchmark rate to a 22-year high of 5%.
The Bank of Canada is widely expected to deliver a second consecutive quarter-point rate hike this Wednesday, which would bring its benchmark lending rate to a 22-year high of 5%.
Bond yields ended the week higher, flirting with a key technical level of 4% following the release of overall strong employment data in both Canada and the U.S.
The creation of 60,000 new jobs in June wasn't enough to keep the national unemployment rate from rising to a seven-month high.
While the pace of fixed-rate increases has slowed, lenders continued to bump mortgage rates higher this week, including three of the big banks.
Another week and another round of fixed rate hikes have swept Canada's mortgage market.
