Here is the latest market commentary provided by First National Financial LP.
The latest policy announcement and monetary statement from the Bank of Canada amount to good news for mortgage borrowers. The Bank is holding its benchmark rate at 1% and has lowered expectations for economic growth.
The Bank is maintaining its stance that the next rate move will be up, but it is also indicating that isn’t likely to happen anytime soon. Reduced growth forecasts, increased slack in the economy and low inflation pressure have some market watchers putting off any rate hike as far as 2015.
There are also external factors that support the ‘lower for longer’ view, in particular the lack of speed in the U.S. recovery and the new, extraordinary efforts by Japan to stimulate its economy. The Japanese moves play into international currency and bond markets where Canada is one of a shrinking number of safe havens. The BoC may be forced to use low interest rates to prevent the Loonie from becoming too strong.
If you have questions or need some advice or help with your mortgage, please contact me.