Now’s the time to act. The ultra low variable rates we’ve enjoyed for most of the year are going into hibernation. Last week a few leading lenders tightened up their guidelines for qualifying borrowers. Over the weekend a few more lessened the discount off the prime rate they’ve been offering, by up to 15 basis points. And tonight, alas, everyone else seems to be following suit.
Danny was a self-employed contractor who owned both his principal residence and a rental property. He had been using as many deductions as possible at tax time, so his taxable income was quite low in comparison to the amount of business he had performed. His income was also quite varied from year to year. Because of the deductions and variations, his bank would only offer him a new mortgage with a hefty premium attached. Continue reading →
Government of Canada Bond Yields immediately dropped by 5% in the wake of the announcement. The Loonie on the other hand rose slightly, while a further dip was likely had there been a rate hike. Oil wasn’t noticeably affected by the announcement, but overall the markets certainly approved.
“Monetary Policy will remain significantly accommodative for quite some time.”
US GDP expanded at 2.25% in the first half of 2015 which was stronger than the Fed expected. However, Inflation is running below the Feds objective.”
There are many factors at play that lead to the Fed’s decision to keep rates where they are and maintain an accommodative monetary policy.
Although most Fed insiders continue to believe that rates will increase in 2015, some participants now believe that a rate hike should be put off until 2016. But regardless of when the hike occurs, and by how much, the Fed was very clear that their policies would remain highly accommodative for some time. If and when rates do begin to increase, they will likely increase very slowly and be accompanied by continued monetary stimulus.
George lost his job a month before Margot had their first baby. Turning to their bank, they were offered a lot of unsecured debt at high interest rates which they accepted in a panic. Over the next few months, with increasing living expenses for the baby, their credit began a downward spiral. When George finally returned to work, their credit was so low the same bank that had previously been so generous now wouldn’t even renew their mortgage. Continue reading →
Economists, bankers, politicians, even the venerable Bank of Canada (BoC) can’t agree where we stand at the moment. The BoC is stuck in a holding pattern hoping that the two rate cuts it delivered to the market this year will be enough to create some sustainable economic growth.
Yesterday the BoC decided to keep the Overnight rate as is. The Bank also released a statement discussing the major factors at play in the Canadian economy. Here are some highlights from a statement that really didn’t say much.
Continue reading →
