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.
