Wednesday, March 1, 2017

Variable rate holders- no change to your mortgage rate!

The Bank of Canada is keeping the target for the overnight rate at ½ percent. In a rather brief interest rate announcement, the Bank noted that, while there are "significant uncertainties" that could impact the outlook of the Canadian and global economies down the road, for now things are consistent with the Bank's January projections, so it's staying the course.

The Bank did note that CPI inflation rose to 2.1 percent in January-something the Bank says reflects higher energy prices due, in part, to new carbon pricing measures in two provinces. Because of this, the Bank believes the increase in inflation is temporary.

Overall, the Canadian economy performed a little above expectations in the fourth quarter of 2016-thanks in part to higher housing indicators. That said, Canadian exports continue to face strong competition and, while there was growth in employment, wages and hours work remain rather subdued. These two factors are contributing to Canada's persistent economic slack, and preventing it from keeping pace with the rebounding United States.

If you have any questions about the most recent interest rate announcement, feel free to reach out to me. Alternatively, you can view the full release here: http://www.bankofcanada.ca/2017/03/fad-press-release-2017-03-01/.

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