Rate Hikes Delayed

Analyst in April were calling for rate hikes by mid-July. However according to new econolic reports, rates are not expected to go up until at least Fall. There are a number of factors influencing it, such as the strength of the Canadian dollar effecting our export relationships and as a result creating a balancing act for our economy. As well as otther factors that would include the still unstable US economy and unemployment rates and considering the economic heath of our neighbors to the south is critical as they are our biggest export partner.
The Big 6 Banks have weighed in on the discussion as well with TD stating that they believe that the Bank of Canada (BoC) may stay rates for the remainder of the year. The Bank of Montreal, was less agressive stating that it is too early to tell if rate hikes will occur later in the year. RBC made quite a statement early this month when they started a campaign to advertise their lowered rates. The projected figures from all 6 banks as of yesterday are as follows;
June 20th Overnight Rate Forecast
Bank 2011 2012
BMO 1.50 2.75
CIBC 1.75 2.00
NBC 2.00 2.75
RBC 1.75 3.00
Scotia 1.50 2.25
TD 1.00 2.00
Year-end Avg 1.50 2.50
Chg vs Today +0.50 +1.50
(Figures above are year-end and rounded to the nearest 1/4 point increment.)
Again giving further strength to the belief that a rate hike is unlikely in coming months, and that the increases are not expected to be as high as was thought in the Spring.
According to the Overnight Index Swap (OIS) there is a less then 50% chance of a rate hike expected this year. The more likely scenario being that a hike will not likely happen until at least February of 2012.
Of course rate forecasts can and do change significanttly regardless off all of the research and analysis that goes into making these predictions. So the best way to make sure that you are getting the most up to date an accurate advice is to seek the advice of a mortgage broker. And it seems that by all indications time is of the essence.