The Bank of Canada (BoC) will announce its next policy interest rate on Wednesday, October 23. Earlier this week, Statistics Canada reported that the…
that the country's inflation rate had dropped to 1.6 per cent, much lower than the BoC's target of 2 per cent. This only strengthens existing speculation that a slew of rate cuts is coming soon.published in September says something more aggressive will occur within less than five months — two half-point cuts in December and January.
This means the rate could drop to 3 per cent in January. But since that report, things have shifted a bit. Penelope Graham, mortgage expert at"This week's latest Consumer Price Index report has given the BoC all the rationale it needs for a jumbo rate cut next week; with inflation falling well below the Bank's own forecast and target range at 1.6 per cent, it's clear they'll need to take faster action on rates to bolster the softening economy," she said.
U.S. inflation numbers also affect Canada, its sister market. Graham says bond yields have fluctuated above 3 per cent in recent weeks due to stronger-than-expected US inflation numbers and job reports both north and south of the border. "Five-year government of Canada yields have dipped back down to the 2.9 per cent range," Graham added. "This could put downward pressure on fixed mortgage rates, with the lowest five-year rate in Canada currently 3.99 per cent."Graham told us that with rates changing so frequently, it's a volatile time to shop for a new mortgage or to be coming up for renewal.
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