Tag Archive for: Inflation and interest rates

Rate Announcment Jan 2023

Rate Announcement Jan 2023

The Bank of Canada did what many had predicted by increasing the overnight lending rate by .25% or 25 basis points. However it is their language in the press release that is providing some optimism going forward. This is key part “expects to hold the policy rate at its current level while it assesses the impact of the cumulative interest rate increases.” They also said that they expect that CPI inflation will come down to 3% this year and back to 2% in 2024.

While nobody wanted another rate increase, at least it was only 25 basis points and that going forward they expect to hold the rates where they are unless demand on goods and services proves much more bullish than currently projected. If this happens then they are prepared to increase the rates yet again. However knowing that … Read more

The Fine Print

The Fine Print

The Bank of Canada will come out with their latest interest rate announcement at 10am eastern or 11am here in the Maritimes. While many of us are expecting at least a 75bps increase to the overnight lending rate, the real meat and potatoes will be in the press release from the meeting.

The devil truly is in the details, as the fourth quarter monetary policy is also announced today. The Bank will give details on whether it thinks that the current and past rate increases are doing what they were supposed to do and if more are necessary. While it is true that the overall inflationary rate is decreasing, it is just not coming down fast enough. It decreased by .1% to 6.9% this month, while the target rate is 2%. We still have a ways to go to get … Read more

Spoiled Rotten

Spoiled Rotten

We have been spoiled rotten with the rock bottom low interest rates that we have had for the past 15 or so years. I am reminded of this fact now that the five year discounted rate is 5.14%. However this sill pales in comparison to high rates of the mid 80’s at 16 or 17%.

People keep asking me when do I see rates coming back down. Well if you listen to the central bankers like Tif Macklem who is the head of the Bank of Canada, it’s going to keep going up before it comes back down. This is because our overall inflation rate is till too high. With the last monthly report from August which had us at 7%. Yes it is coming back down from it’s record high this summer, it’s just not coming back to earth … Read more

What does it mean

What does it mean?

Yesterday for the first time a very long time ( 26 years in-fact) the Bank of Canada raised the key overnight lending rate by 100 basis points or 1 full percentage point. As a result the bank prime lending rate is now 4.7%.

Many of us are now waking up this morning asking what does this all mean and how will it impact me. Firstly if you have a variable rate mortgage your payment has now increased. Those with lines of credit their payments have also increased. Basically if you are looking to borrow money it has now become more expensive. The days of cheap/free money are now officially over.

The Bank of Canada has made these moves in an effort to bring inflation which is now at 40 year highs under control. In-fact just prior to the BOC making … Read more

BOC Rate Announcement

BOC Rate Announcement

The Bank of Canada meets today and will publish their latest policy on interest rates. Most economists are widely expecting a 75 basis points increase similar to what the Federal Reserve did in the US just recently. If this does happen it will be the largest rate increase in over 26 years. Which many believe is required to finely bring our sky high inflation under control.

With the announcement today that the US CPI numbers just hit 9.1% for June which is a 40 year high, it is almost assured that we will have an oversized rate increase.

Well the BOC just exceeded everyone’s expectation by increasing the overnight lending rate by 100 basis points to 2.5%. This as a result will increase the prime lending rate from 3.7% to 4.7%. So those with variable rate mortgages or lines of … Read more

Inflation and interest rates

Inflation and interest rates

There is lots of talk about an impending increase to the bank of Canada prime lending rate. This is because inflation has been on the rise recently. Also rising inflation is usually a sign that the economy is doing well. While I do not profess to be an economist and can’t really give you any hard facts on GDP, I do see the costs of almost everything going up. The cost of gas has almost doubled since last year, most car lots are empty as they can’t get enough vehicles and year over year the cost of new homes in Halifax has increased by 21.2%

Now does that all point to a booming economy as the real reason for the prices of almost everything increasing. I think it’s more complex than that. Nationally we are still adding jobs, 31K in … Read more