10/27/2021
The Bank of Canada just accelerated their outlook on inflation and rate increases. See press release here https://www.bankofcanada.ca/2021/10/fad-press-release-2021-10-27/
The message delivered in their recent press release has sent BOC bond yields and the CAD$ upwards. This news while creating quite a stir today, has created more pressure on fixed rate mortgage levels. We have seen some increases over the past few weeks due to bond yields and we may be in for more raises this week. The CAD$ moving up is good news for those over the border shoppers and snow birds as the border is set to re-open next month.
The BoC while upsetting the cart a bit today, time will tell how it plays out and the effect it has on Prime. According to the press release, the BoC is targeting the middle quarters of 2022 for a potential raise. Some major triggers have to occur for them to make this move earlier than expected.
See below for some quick snippets from their press release and graphs
Loonie Rebounds on Bank of Canada’s Hawkish Turn
Bank of Canada Holds Overnight Rate at 0.25% Lower Bound
BOC Cuts Potential Growth Estimates on Supply Disruptions
BOC Sees Output Gap Closing as Early as 2Q 2022, From 2H 2022
BOC Sees Higher Inflation Into Next Year, Easing in Late 2022
Bank of Canada Accelerates Potential Timing of Rate Hikes
Bank of Canada Ends Quantitative Easing, Moves to Reinvestment
5 YR GOC Bond
The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent.
