Canadian purchasers and homeowners tracking interest rates in order to make an informed decision regarding first mortgage or mortgage refinancing costs got mixed signals on Friday, Aug. 20. Reuters reported that Canadian domestic inflation numbers and renewed fears of slowing global gave some pause to analysts forecasting whether or not the Bank of Canada would raise its interest rate on September 8.
“Canadian consumer prices charged higher in July as new sales taxes took effect in Ontario and British Columbia,” reported Reuters, “but underlying inflation remained tame, fueling doubts about how fast the Bank of Canada would continue to raise interest rates as the recovery loses steam.”
“Soft inflation numbers,” said CIBC World Markets’ chief economist, Avery Shenfeld, “just added further weight to the notion that the Bank of Canada would have to go on hold on rates at some point soon.” Nonetheless, Reuters reports that its poll amongst Canada’s primary securities dealers taken after the release of Canadian inflation numbers for July showed analysts still predicting that the Bank of Canada will raise interest rates in September. However, Reuters notes, “uninspiring economic data has cast doubt on the pace of future increases.”
So it remains a waiting game as to whether the Bank of Canada will, in fact, raise its market setting interest rate in a few weeks. Homeowners or purchasers may wish to take action to refinance or secure their mortgage rate before September 8th, given the uncertainty about the timing of further rate increases. The one thing that is certain is that rates won’t be going down any time soon. It may be the time to lock in low rates.
