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Posted 3 Comments on US Fed rate hike doesn’t mean Bank of Cda rate hike! Mortgage Rates

US Fed rate hike doesn’t mean Bank of Cda rate hike!

Janet YellenLast month, the US Fed Reserve Bank Chairperson, Janet Yellen, raised rates for the first time since 2006.    Historically, Canada follows the US with rate movement..  However, times are changing…Don’t expect Canada to follow the US move anytime soon.

stephen polozDivergence.  That’s the new buzz-word.  Bank of Cda Govr, Stephen Poloz said, “Usually you think of the Canadian economy following the U.S. economy fairly closely. This will be one of those places where it really doesn’t.”   “But as a macro statement, there will a divergence there. We’re already seeing it, and so you should expect a divergence in policy too,” he said. Continue reading “US Fed rate hike doesn’t mean Bank of Cda rate hike!”

Posted 1 Comment on Negative interest rates by the Bank of Canada… No, not likely. Interest rates

Negative interest rates by the Bank of Canada… No, not likely.

stephen polozYou gotta love the media.  Yesterday, the Bank of Canada Governor gave a speech and announced a change in contingency plans should we fall into another financial crisis… like the US-made global recession in 2008.

But if you read the headlines, you would think the sky has fallen.  All I kept seeing were headlines claiming “Canada could see Negative interest rates.  Below zero interest rates.   Canada would consider negative interest rates…  ”   Wow, talk about misleading the public.

Okay, so here’s what he really said, and this is straight from the Bank of Canada website…I quote… “We don’t need unconventional policies now, and we don’t expect to use them. However, it’s prudent to be prepared for every eventuality,” Governor Poloz said in a speech today to the Empire Club of Canada.

He went on to say that he believes that our economy is on target to rebound for 2017.. and here’s another direct quote.  “The Bank is forecasting increasing annual growth in 2016 and 2017, with the Canadian economy expected to reach full capacity around mid-2017.”

I think this is pretty clear.   The ‘worst case scenario’ plan has changed..  and the BOC govr expects our economy to rebound in the next 12 to 18 months.   Hope this helps to clarify the message.  Keeping it real.. and keeping it simple.

Your best interest is my only interest.   I reply to all questions and I welcome your comments.  Like this article?  Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

Posted Mortgage News

New threat of Rate hikes… it’s called Finance Minister Flaherty.

Flaherty thumbs up The Federal govt of Canada and the Bank of Canada are supposed to operate independently.  The Minister of Finance gives the Bank of Canada its objectives or its mandate.   And the Bank of Canada is supposed to carry out that mandate.   The dotted line is supposed to allow the Bank of Canada Governor to exercise his/her powers without fear of political influence.

THE COMMENT

But our current Finance Minister, Mr. Flaherty, doesn’t seem to like those rules.  He has repeatedly opened his mouth at inopportune times.   Take last year, for example, when he publicly criticized Manulife Bank and BMO for advertising a 2.99% 5 yr fixed rate.  He actually asked them to pull those ads!  Not that they were the lowest 5 yr fixed rates at the time, but they were the lowest advertised rates by a major BANK. (as my regular readers know, mortgage brokers had lower rates… as they usually do). Continue reading “New threat of Rate hikes… it’s called Finance Minister Flaherty.”