Bank of Canada reveals October rate decision
The central bank has made its second-to-last scheduled rate announcement of the year The Bank of Canada has left its policy interest rate unchanged in its latest decision, opting not to raise rates further amid signs that the national economy is beginning to slow. The central bank announced this morning that it was holding that trendsetting interest rate steady at 5.0%, the second time in a row it has kept rates where they are as inflation continues to moderate and economic growth remains largely flat. In its statement accompanying the decision, the Bank said it was prepared to raise …
Bank of Canada likely to begin cutting rates in mid-2024: CIBC’s Tal
The Bank of Canada will probably start cutting interest rates by the middle of 2024 – and its overnight rate is likely to settle around 3%, according to CIBC deputy chief economist Benjamin Tal (pictured top). Speaking at the Mortgage Professionals Canada (MPC) national conference in Toronto this week, Tal said the central bank is reaching an endpoint on rate hikes, with its trendsetting rate likely to stay around its current level for the first half of next year before ticking downwards again. With the Bank’s penultimate rate announcement of the year scheduled to take place next week (October …
Canada inflation falls in September
Canada’s inflation rate ticked down slightly in September, falling to 3.8% compared with a 4% reading the previous month. Statistics Canada said on Tuesday that the broad-based deceleration had been driven mainly by lower grocery prices and costs of durable goods and travel-related services – although the price of gasoline surged, spiking by 7.5% last month. Mortgage interest and rent costs were by far the biggest contributors to the 12-month change in the consumer price index (CPI). The cost of servicing a mortgage compared with the previous September rose by 30.6%, with rent increasing at a yearly rate of 7.3%. …
How will a strong labour market impact the Bank of Canada’s next move?
The Canadian economy’s significant employment gains in September will likely put more pressure on the Bank of Canada as it approaches its next policy rate announcement, according to market observers. Data from the national statistics agency indicated that 64,000 jobs were added to the national economy last month, far exceeding earlier consensus predictions of a 20,000 gain. And while the unemployment rate was steady at 5.5%, Statistics Canada said that hourly wages surged by 5.3% year over year, markedly outpacing the most recent reports of 4% annual inflation. Dawn Desjardins, chief economist at Deloitte Canada, said that she “absolutely” agrees that …
70% chance of a soft landing, former Bank of Canada governor says
A former deputy governor of the Bank of Canada says the central bank’s aggressive rate hikes have effectively slowed the economy, making a soft landing likely, though he cautions that outcome is not guaranteed. Canadian inflation accelerated to four per cent in August year-over-year primarily due to higher oil prices. Should the trend of sticky inflation continue, the chance for a soft economic landing will become less probable, Paul Beaudry, former deputy governor of the Bank of Canada, told BNN Bloomberg in a television interview on Monday. “I would only say there’s a 60 to 70 per cent chance of a soft …
The bad economic times have only just started
A strike by port workers in British Columbia slowed economic activity in July. PHOTO: (DARRYL DYCK/THE CANADIAN PRESS) Is Canada already in a recession? We should get a good indication this week. The Canadian economy is headed for a rough patch. Growth has already slowed considerably. Job growth has moderated. Inflation remains stubbornly high. But the pain households are feeling today is only going to get worse. The path forward looks bleak, Tiago Figueiredo, a macro strategy associate with Desjardins, said in a note. For a while there, the economy proved more resilient than expected. The Bank of Canada’s …
Another week, another rise in fixed mortgage rates. How high could they go?
The Canadian mortgage market has been completely overtaken by fixed rate hikes for yet another week. Following the recent spike in Government of Canada bond yields, which are used to determine the price of fixed-rate mortgages, mortgage lenders, including the majority of the main banks, proceeded to raise their fixed mortgage rates. Over the past week, a number of major banks, including BMO, CIBC, and RBC, increased their advertised rates by 15 to 40 basis points. One basis point is equal to 1/100th of a percentage point, or 0.01%. Data from MortgageLogic.news shows that shorter 1- and 2-year periods saw …
Canada’s economy outperforms in first quarter, raising pressure on Bank of Canada ahead of next week’s rate decision
The first quarter saw the Canadian economy expand by 3.1 percent on an annualized basis, surpassing predictions and increasing the pressure on the Bank of Canada to consider another interest rate hike, potentially as early as next week. Following a stagnant fourth quarter in 2022, the economy experienced a revival in the initial months of this year, thanks to strong exports and resilient consumer spending. This positive momentum appears to have carried over into April, as per a preliminary estimate by Statistics Canada, which indicates robust growth in that month, despite the adverse effects of the federal government workers’ strike. …
Stock Buybacks Hurt Workers and the Economy
Workers, innovation, and productivity all suffer when corporations spend their new U.S. tax breaks on stock buybacks. …
Time to Stand Up for Dumb
Let’s start out with a smart device undershoot that seldom gets mentioned: e-books. E-book sales fell in 2015 and fell even more in 2017 as both paperback and hardback sales rose. …
