Evaluating Your Portfolio in an Uncertain Market – An eBook for Lenders of All Sizes
No Increase to Canadian Interest Rate for September 2019
The Bank of Canada (BOC) is not increasing the Canadian interest rate in September 2019.
On September 4, 2019, the BOC announced that the overnight rate is staying at 1.75%. The Bank Rate is correspondingly 2% and the deposit rate is 1.5%.
The last time the BOC interest rate increased was in October of 2018.
While Canadian economic growth was strong in the second quarter of 2019, there are other global concerns that stayed the BOC. Specifically:
- The BOC stated that the U.S.-China trade conflict has escalated.
- World trade has contracted.
- Business investment has weakened.
- These concerns, among others, have “pushed bond yields to historic lows and inverted yield curves in a number of economies, including Canada.”
The Canadian economy exceeded the BOC’s expectation, but they warned that strength may only be temporary. Stronger energy production and export growth both recovered from the first quarter of 2019.
The Canadian housing market was also featured prominently in the September 4 announcement. The BOC stated:
“Housing activity has regained strength more quickly than expected as resales and housing starts catch up to underlying demand, supported by lower mortgage rates. This could add to already-high household debt levels, although mortgage underwriting rules should help to contain the buildup of vulnerabilities.”
In addition, Canadian wages have picked up, but consumption spending was soft in Q2 2019. The BOC expects economic activity to slow in the second half of the year.
The next BOC announcement is scheduled for October 30, 2019. As it approaches, the BOC will be paying particular attention to global developments and their impact on the Canadian economy.
Read the full BOC release here: https://www.bankofcanada.ca/2019/09/fad-press-release-2019-09-04/
Purview has property data tools help make the most of any housing market. Discover the latest trends, compare sales, mitigate risk, and more. Get started today by calling 1-855-787-8439 or visiting www.purview.ca.
Purview is just one of Teranet’s Financial Services Solutions; stay tuned for our upcoming portfolio unveiling!« Back to Blog