Today was a meeting with the Bank of Canada to go over all things financial in Canada, mortgages included. In today’s canadianmortgagetrends.com article it reads:
It’s Status Quo With the BoCCarney and company have again left Canada’s trendsetting overnight rate as-is. That leaves prime rate steady at 3.00%, with no change in sight.
It’s been two years now since prime last inched higher, giving variable-rate mortgage holders an unexpectedly long vacation from higher interest costs.
In its statement today, the Bank said:
- “…Global headwinds continue to restrain economic activity…”
- “Economic growth is expected to pick up through 2013…”
- “Core inflation…is expected to return, along with total CPI inflation, to 2 per cent over the course of the next 12 months.”
- “To the extent that the economic expansion continues and the current excess supply in the economy is gradually absorbed, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate.”
When it will become “appropriate” is anyone’s guess. CIBC economist Avery Shenfeld calls the Bank’s jawboning on rates “only words, not action.” Its hands are tied with a global and domestic economy that remain in choppy waters.
For what it’s worth, Bay Street rate seers forecast the next boost to prime in mid- to late-2013. That date has been continually pushed back since the BoC last lifted rates in September 2010. Pretty much the most one can surmise with confidence is that rate cuts appear out of the picture this year, given the Bank’s tightening bias.
The bond market was little changed on the BoC announcement with the 5-year benchmark drifting around 1.33%. Its one-year average is 1.40%.
The next BoC rate meeting is October 23.