Canadian home mortgage rates are very likely to hold steady at current levels – at least in the near-term. A recent speech in Windsor, Ont., by Bank of Canada Governor, Mark Carney, has “reinforced a growing belief among Bay Street traders that the odds of another rate hike this year were dwindling to nearly zero,” reports Paul Vieira, of the National Post.
Mr. Carney, according to the Post report, cautioned Canadians that they should brace for “modest” economic growth in the coming months. He acknowledged that slower than forecast growth “will be reflected in the [Bank of Canada’s] revised forecast to be released on Oct. 20, in which third-and-fourth-quarter estimates would be lowered.”
The Bank of Canada governors meet on October 19 to review its market-setting overnight lending rate, which will be followed by the release of the bank’s revised economic forecast on Oct. 20. Mr. Carney seemed to have tipped his cards in his remarks in Windsor, noting that any additional increases to interest rates in an uncertain economic would warrant “caution”.
Economists commenting on the downward revisions in the bank’s estimate of GCP and the “new dovish commentary” in Mr. Carney’s speech, “point to a central bank that is done, for now, with rate hikes,” writes Mr. Vieira.
Postponement of further Bank of Canada rate hikes is good news for what Mr. Canney described as “overstretched households.” Continuing low Canadian mortgage rates, and lower interest on home equity lines of credit, will help Canadian homeowners with their household balance sheets, as Canada’s economic recovery is slowed due to weakened U.S. demand and a sluggish U.S. economy.
