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Bank of Canada rate

Discussion in 'TRIBE Main Forum' started by madnezz, Dec 9, 2008.

  1. kyfe

    kyfe TRIBE Member

    I get doing upgrades etc but some people were just going on a huge buying spree like they won the lotto. I guess it's the illusion of having money
     
  2. kyfe

    kyfe TRIBE Member

    I speculate you have 2 years before things start to get real nasty for some, the nastiness starts now with increased rates but I think most will be fine until we see 4 or 5 straight increases, which i think we will see during that time. We've had 7 years of historically low rates but I don't think will see a major impact until mortgage offers get around 5% on avg for a 5 year closed. Regardless I don't forsee a 40% correction but 20% is possible, the bottom line is people want to live here and as long as that demand continues it should cushion the correction on prices
     
  3. Bernnie Federko

    Bernnie Federko TRIBE Member

    Ha ha, not gonna happen. Interest rates won't be back at 5% for 25 years. If you think essentially doubling the retail prime is gonna happen, I have a bridge for sale and prime real estate in Florida with your name on 6.
     
  4. kyfe

    kyfe TRIBE Member

    why not? they're almost at 3% now (posted) BTW my timeline of 2 years is when we start to see things really go sideways for some.
    We will see 5% posted rates on 5yrs within the next 10 years I'm thinking

    like I said nothing more than pure speculation but I am highly interested in that bridge so I can charge people to jump off it when they can't pay their mortgages
    [​IMG]
     
  5. kennyboy

    kennyboy TRIBE Member

    And there in lies the problem. 5% OMG. LOL

    Ask anyone (perhaps your parents) that we're paying 15 - 20 percent for their mortgage and see if they could manage. But of course these would be the same people that lived within their means and didn't feel it was ok to buy whatever they want .

    Different generation for sure and I'm somewhere in the middle but I have no expectation that rates will stay low forever, and I would have no problem if they go up 25 basis points once or twice a year.
     
  6. wickedken

    wickedken TRIBE Member

    The real headline this week should be "BoC Accepts 6.5% Unemployment", doesn't see the massive structural changes taking place due to computerization and the Internet, doesn't see increased energy costs including from taxation, and renews the recession.
     
  7. Bernnie Federko

    Bernnie Federko TRIBE Member

    I believe that these rates are being raised not in order to target inflation (around 2%), but as a measure of ensuring there's both room to cut if need be down the road, and prevent too much more non - mortgage debt.

    Ask Japan about interest rates...
     
  8. Puma

    Puma TRIBE Member

    Yes but when the mortgage rate was 15-20 % what was the average house price ?? was it 1 million or closer to 100 K? it does matter.
     
  9. wickedken

    wickedken TRIBE Member

    They're not concerned at all about the overnight rate. Emphasis mine.

    Bank of Canada increases overnight rate target to 3/4 per cent

    OTTAWA, July 12, 2017 /CNW/ - The Bank of Canada is raising its target for the overnight rate to 3/4 per cent. The Bank Rate is correspondingly 1 per cent and the deposit rate is 1/2 per cent. Recent data have bolstered the Bank's confidence in its outlook for above-potential growth and the absorption of excess capacity in the economy. The Bank acknowledges recent softness in inflation but judges this to be temporary. Recognizing the lag between monetary policy actions and future inflation, Governing Council considers it appropriate to raise its overnight rate target at this time.

    The global economy continues to strengthen and growth is broadening across countries and regions. The US economy was tepid in the first quarter of 2017 but is now growing at a solid pace, underpinned by a robust labour market and stronger investment. Above-potential growth is becoming more widespread in the euro area. However, elevated geopolitical uncertainty still clouds the global outlook, particularly for trade and investment. Meanwhile, world oil prices have softened as markets work toward a new supply/demand balance.

    Canada's economy has been robust, fuelled by household spending. As a result, a significant amount of economic slack has been absorbed. The very strong growth of the first quarter is expected to moderate over the balance of the year, but remain above potential. Growth is broadening across industries and regions and therefore becoming more sustainable. As the adjustment to lower oil prices is largely complete, both the goods and services sectors are expanding. Household spending will likely remain solid in the months ahead, supported by rising employment and wages, but its pace is expected to slow over the projection horizon. At the same time, exports should make an increasing contribution to GDP growth. Business investment should also add to growth, a view supported by the most recent Business Outlook Survey.

    The Bank estimates real GDP growth will moderate further over the projection horizon, from 2.8 per cent in 2017 to 2.0 per cent in 2018 and 1.6 per cent in 2019. The output gap is now projected to close around the end of 2017, earlier than the Bank anticipated in its April Monetary Policy Report (MPR).

    CPI inflation has eased in recent months and the Bank's three measures of core inflation all remain below 2 per cent. The factors behind soft inflation appear to be mostly temporary, including heightened food price competition, electricity rebates in Ontario, and changes in automobile pricing. As the effects of these relative price movements fade and excess capacity is absorbed, the Bank expects inflation to return to close to 2 per cent by the middle of 2018. The Bank will continue to analyze short-term inflation fluctuations to determine the extent to which it remains appropriate to look through them.

    Governing Council judges that the current outlook warrants today's withdrawal of some of the monetary policy stimulus in the economy. Future adjustments to the target for the overnight rate will be guided by incoming data as they inform the Bank's inflation outlook, keeping in mind continued uncertainty and financial system vulnerabilities.

    Information note:

    The next scheduled date for announcing the overnight rate target is September 6, 2017. The next full update of the Bank's outlook for the economy and inflation, including risks to the projection, will be published in the MPR on October 25, 2017.
     
  10. Bernnie Federko

    Bernnie Federko TRIBE Member

  11. wickedken

    wickedken TRIBE Member

    jeez you must run the twitter miners.
     
  12. Bernnie Federko

    Bernnie Federko TRIBE Member

    ????
     
  13. kyfe

    kyfe TRIBE Member

    5 yr fixed is 3% posted... two increases already this year, likely a 3rd before 2018

    I put a deposit on the bridge but have heard nothing from you about completing the sale
     
    Bernnie Federko likes this.
  14. Bernnie Federko

    Bernnie Federko TRIBE Member

    Send me deposit I've got other parties interested
     
  15. Bernnie Federko

    Bernnie Federko TRIBE Member

    Bank of Canada, major lenders hike rates as economy roars

    With the economy booming, the Bank of Canada has hiked its key interest rate for the second time in less than two months. The quarter-percentage-point hike brings the rate to 1 per cent. Other lenders followed suit by raising their own prime lending rates. The Canadian dollar jumped to nearly 82 cents (U.S.). on word of the hike; economist David Rosenberg saysthis rate hike has him rethinking his perspective on the loonie. The move will likely discourage people from buying homes and put pressure on those that have major debts. The Greater Toronto Area has already seen major price declines of late and this could lead to a further downward swing.
     
  16. Bernnie Federko

    Bernnie Federko TRIBE Member

    From the US Right Wing finance newsletter/rag I subscribe to...


     
  17. kyfe

    kyfe TRIBE Member

    Is that your way of saying I might be right?
     
  18. Bernnie Federko

    Bernnie Federko TRIBE Member

    Uh, no not at all. I agree that rates were rising. Just not to 5%.
     
  19. kyfe

    kyfe TRIBE Member

    we could be up a full 1% by the end of the year (bank posted not BOC)
     
  20. Bernnie Federko

    Bernnie Federko TRIBE Member

    Retail rates will fluctuate then race to the bottom. I ain't worried about that.

    Send me that scrilla dough for the bridge, bro!
     
  21. Bernnie Federko

    Bernnie Federko TRIBE Member

  22. Bernnie Federko

    Bernnie Federko TRIBE Member

    OTTAWA/TORONTO (Reuters) - The Bank of Canada is walking a tightrope to its next rate decision, trying to rein in a Canadian dollar that has popped higher in the wake of back-to-back rate hikes - without jawboning the currency too explicitly.



    While talking down the currency risks upsetting the bank’s G20 peers, rapid appreciation of the loonie could put the brakes on the country’s economy just as it gains momentum.



    The currency has risen 9 percent against the greenback this year. It jumped 2.5 cents after an unexpected Sept. 6 rate hike and bank statement that said the loonie’s appreciation reflected economic strength.



    Markets took the language to mean policymakers were comfortable with a stronger Canadian dollar, even though it hurts already anemic exports. Deputy Governor Tim Lane moved to mitigate that view on Monday, saying the bank was closely watching currency strength and would take “that into account pretty strongly” in its decisions.



    Lane’s words did the job, erasing nearly all of the gains the loonie made in the wake of the rate hike.



    All eyes are now on Governor Stephen Poloz’s speech next Wednesday, with the market expecting him to keep the dollar in check without opening himself to charges from global peers that he’s manipulating the currency.



    “The 2.5 cent (jump) is not something any central bank wants to see. They don’t ever want to wrong-foot the market in that kind of way,” said Michael Goshko, corporate risk manager at Western Union Business Solutions.



    “The market will expect Poloz to clarify this concern even further, as the head of the bank.”



    The September rate rise followed one at the preceding meeting in July, Canada’s first hike since 2010. Raising rates at consecutive meetings has only spurred expectations for another increase in October.



    This is a trend the central bank will not want and that Poloz could help break.



    The urgency conveyed by the bank’s back-to-back rate hikes suggested the bank may believe it is behind the curve on tackling inflation, said Adam Button, currency analyst at ForexLive. If it signals that concern, the currency is likely to rise further as markets price in more rate hikes.



    Economic data released on Friday showed inflation ticked up in August, suggesting the bank has room to lift rates further.



    Keeping a lid on the currency is important for the bank, with a stronger dollar making Canadian goods more expensive abroad. Weaker exports will dampen economic growth.



    The bank is more worried about the speed of the currency’s rise than its actual level, said Hendrix Vachon, senior economist at Desjardins.



    But Canada and its G20 peers have agreed not to manipulate their currencies to gain competitive ground, and the issue has cropped up in the current NAFTA renegotiations. So Poloz and his colleagues have to choose their words carefully, even if analysts say there is more scope to address the issue outside of a policy statement.



    “What’s agreed amongst the (G20) club is, you don’t talk about levels. You are slightly forgiven for verbally intervening if you’ve had excessive volatility,” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets.
     
  23. Bernnie Federko

    Bernnie Federko TRIBE Member

  24. Bernnie Federko

    Bernnie Federko TRIBE Member

  25. CiG

    CiG TRIBE Member

    Scrolling through the news stream today after seeing the rate announcement. I saw the following that nicely describes the financial status of Canadians.

    [​IMG]

    Edit, on top of that we are buying used fighter jets from Australia.
     
    Bernnie Federko likes this.

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