The Bank of Canada announced this week that they’re keeping their overnight rate target at 1.75%.
The bank reports that the Canadian economy is operating close to potential and that inflation is about where they expected it would be at this point. In fact, economic growth was stronger than the bank had predicted.
That’s the good news.
The bad news is that the positive national economic outlook is being tempered by global economic concerns. The trade conflict between China and the US seems to be escalating. US economic growth has moderated. Commodity prices have dropped. Bond yields are at historic yields in several economies.
So, given the bittersweet economic position, the bank thinks holding off again on rate increases is the most appropriate action at the moment.
On a housing market note, the bank claims that housing activity has regained strength. In fact, it rebounded more quickly than they had expected, driven mostly by resales and housing starts began catching up to underlying demand, as well as lower mortgage rates.
The benchmark rate is still lower than inflation. As such, anyone renewing a mortgage today will likely get a lower rate than in the past.
The next rate update will occur in October.
If you want to know what options are available, are interested in renewing your mortgage to take advantage of the low rates, or want to find the best rate for you today, contact our office.