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BofC Overnight Target Up 0.25%

As many expected, the Bank of Canada raised rates 0.25%, making the overnight rate 1%. Most banks followed suit, making the prime rate 3%.

Here’s the high points from the press release (via Canadian Mortgage Trends)

  • “…Consumption growth is expected to remain solid and business investment to rise strongly.”
  • “The Bank now expects the economic recovery in Canada to be slightly more gradual than it had projected…”
  • “…Financial conditions in Canada have tightened modestly but remain exceptionally stimulative.”
  • “Any further reduction in monetary policy stimulus would need to be carefully considered in light of the unusual uncertainty surrounding the outlook.”

I posted a quick survey the day before the announcement, and here’s what people thought would happen.

It’s a difference of $13 on every $100,000 of mortgage, which is chump change. These are some screaming low rates, and there’s been talk about how the global economy will be growing at a little bit slower pace moving forwards, which also means we’re not as likely to see double-digit interest rates in the near future.

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