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Posted by: Gabriel Da Silva
The Canadian Real Estate Association says home sales in February bounced 2.3% from the previous month. Homeowners and buyers were comforted by the guidance from the Bank of Canada that it would likely pause rate hikes for the first time in a year. The Canadian aggregate benchmark home price dropped 1.1% in February, the smallest […]
Read MorePosted by: Gabriel Da Silva
As expected, the central bank held the overnight rate at 4.5%, ending, for now, the eight consecutive rate increases over the past year. The Bank is also continuing its policy of quantitative tightening. This is the first pause among major central banks. Economic growth ground to a halt in the fourth quarter of 2022, […]
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With variable mortgage rates potentially at a peak and fixed rates having recently retreated, borrowers are asking themselves the age old mortgage question: should you go fixed or variable? It’s a decision being faced by anyone in the market to purchase and those with upcoming renewals. And there are two schools of thought […]
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Today’s Labour Force Survey (LFS) for January was much stronger than expected, once again calling into question how long the Bank of Canada’s rate pause will last. This report showed no evidence that the labour market is slowing in response to the vast and rapid runup in interest rates. Employment surged by 150,000–ten times […]
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As expected, the Bank of Canada–satisfied with the sharp decline in recent inflation pressure–raised the policy rate by only 25 bps to 4.5%. Forecasting that inflation will return to roughly 3.0% later this year and to the target of 2% in 2024 is subject to considerable uncertainty. The Bank acknowledges that recent economic growth […]
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OSFI leaves mortgage stress test unchanged Canada’s banking regulator confirmed today it will leave the mortgage stress test for uninsured mortgages unchanged. In its annual review of the minimum qualifying rate (MQR) used by federally regulated lenders, the Office of the Superintendent of Financial Institutions (OSFI) said the MQR has provided a margin of safety […]
Read MorePosted by: Gabriel Da Silva
The Governing Council of the Bank of Canada raised its target for the overnight policy rate by 50 basis points today to 3.75% and signalled that the policy rate would rise further. The Bank is also continuing its policy of quantitative tightening (QT), reducing its holdings of Government of Canada bonds, which puts additional […]
Read MorePosted by: Gabriel Da Silva
Fixed mortgage rates are expected to take another step up next week, pushing some 5-year fixed mortgages into 6% territory. Five-year fixed mortgage rates typically follow the Government of Canada 5-year bond yield, which surged more than 40 basis points over the course of the week—briefly reaching a 14-year high on Friday—before retracing some of […]
Read MorePosted by: Gabriel Da Silva
Canada’s headline inflation rate ticked down slightly last month to 6.9%, but measures of core inflation remain stubbornly high, and food prices hit a 41-year high. Lower gasoline prices were primarily responsible for the decline in inflation in the past three months. Bond markets sold off on the immediate release of the data this […]
Read MorePosted by: Gabriel Da Silva
Forty-Three Years Ago, I Was Fed Chair Paul Volcker’s Special Assistant Inflation appears to be book-ending my career. I started my work as an economist in the Research Division of the Federal Reserve Board in Washington, D.C., in the late 1970s. Inflation had been trending higher for years. Neither Arthur Burns nor G. William […]
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