Posted in Bank of canada rates, BC Mortgages, Best Rate Mortgages, British Columbia Mortgages, Canadian Economy, Canadian Housing Market - Lisa Alentejano, Kamloops broker, Kamloops Mortgage Broker, Mortgage Affordability, Mortgage Broker Kamloops, Mortgage by Lisa Alentejano, mortgage financing kamloops

Bank of canada – holds key rate – steady eddie…..

As expected today Bank of Canada is holding the key rate steady..so for all you variable rate mortgage holders, your probably giving a sigh of relief as you can still take advantage for a couple more months with a low interest rate and no change to your payment, or you could contact me, to introduce you to the Inflation Hedge Strategy which when implemented, will protect yourself against the increase of interest rates and allows me to monitor your rates for you.  Hope for the best, plan for the worst.

Here are some of the comments from the Bank of Canada announcement today;

Parsing through the comments of Mark Carney, Bank of Canada governor, there are definite signs that the central bank is taking a firmer stance on plans to remove monetary stimulus sooner rather than later.

Here’s some highlights from the bank’s July statement:

  • The bank is now saying “some of the considerable monetary policy stimulus currently in place will be withdrawn” (emphasis ours) compared with “eventually withdrawn” in the last statement
  • Economy now forecast to grow 2.8% in 2011, 2.6% in 2012, 2.1% in 2013
  • Down slightly from April forecast of 2.9% growth in 2011
  • Forecasts for 2012 and 2013 remain unchanged
  • Headline inflation is expected to stay north of 3% due mostly to “temporary factors” including significantly higher energy and food prices
  • Core inflation is “slightly” higher than anticipated, owing in part to “persistent strength in the prices of some services”
  • Core CPI to remain around 2%
  • Total inflation expected to return to 2% target in middle of 2012
  • Economic expansion proceeding “largely” as projected
  • Canadian growth still expected to re-accelerate in the second half of 2011
  • “Growth in household spending is now projected to be slightly firmer, reflecting higher household income” relative to April projections
  • Bank forecasts “assumes authorities are able to contain the ongoing European sovereign debt crisis, although there are clear risks around this outcome”

Here’s what analysts are saying about the bank’s comments:

Avery Shenfeld, chief economist, CIBC World Markets

  • “The troubles abroad and challenges to net exports kept the bank from hiking as early as today”
  • “Signs of better growth in the U.S. and Canada in the second half would clearly be enough to tip the bank into hiking, and we should have enough of that evidence on hand by October”

Michael Gregory, senior economist, BMO Capital Markets

  • “Rate hikes don’t appear imminent (read: not likely in September), reflecting a downgraded and riskier near-term outlook”
  • “We are sticking to our call for October and December rate hikes this year”
  • “The bank is betting that the inflation profile won’t make tightening more of a lay up move; we’re somewhat more skeptical”

Bank of Canada next meet September 12, 2011.

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