{"id":13105,"date":"2019-07-06T11:11:07","date_gmt":"2019-07-06T18:11:07","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=13105"},"modified":"2019-07-04T09:46:34","modified_gmt":"2019-07-04T16:46:34","slug":"canadian-interest-rates-are-heading-for-a-cut","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2019\/07\/canadian-interest-rates-are-heading-for-a-cut\/","title":{"rendered":"Canadian Interest Rates are Heading for A Cut"},"content":{"rendered":"<p style=\"text-align: justify;\">Most experts anticipate that the next time the Bank of Canada adjusts its policy rate, it\u2019ll make a cut.<\/p>\n<p style=\"text-align: justify;\">So suggests a recent survey of 14 economic researchers, who financial-comparison website finder.com polled ahead of the central bank\u2019s next rate announcement, scheduled for July 10th.<\/p>\n<p style=\"text-align: justify;\">Some 62 percent are in the cut camp, compared to 38 percent banking on a rate increase.<\/p>\n<p style=\"text-align: justify;\">The Bank of Canada has stood on the sidelines since late October, when it hiked the overnight rate \u2014 which influences the mortgage market \u2014 by 25 basis points to 1.75 percent.<\/p>\n<p style=\"text-align: justify;\">It was the fifth time the bank had pulled up the overnight rate since the summer of 2017, when policymakers began tightening the credit market amid an overheated housing market.<\/p>\n<p style=\"text-align: justify;\">Recovery in Canadian housing markets following a period of adjustment to higher interest rates and stricter lending rules, as well as the country\u2019s recent economic performance are some reasons economists cited to support the call for the Bank of Canada to remain on hold next week.<\/p>\n<p style=\"text-align: justify;\">\u201cThe Canadian economy has been performing in line with, if not ahead of, Bank of Canada expectations. Key housing markets are showing signs of recovery, and economic growth appears set to speed up notably in the second quarter,\u201d says TD Senior Economist Brian DePratto.<\/p>\n<p style=\"text-align: justify;\">\u201cThe external backdrop remains highly uncertain, which, balanced against domestic strength, suggests the current interest rate setting is about right,\u201d he adds.<\/p>\n<p style=\"text-align: justify;\">Moshe Lander, an economics professor at Montreal\u2019s Concordia University, is among the experts who suggest maintaining the current rate is the right call for next week. \u201cThe next move is likely a cut in the overnight rate. It is best to hold onto that option until there are clear signs of a recession,\u201d he explains.<\/p>\n<p style=\"text-align: justify;\">Half of the economic observers surveyed say the stateside Federal Reserve\u2019s rate policy will influence the Bank of Canada to a moderate or greater extent.<\/p>\n<p style=\"text-align: justify;\">\u201cBy plotting both rates in a graph, you can easily notice that historically, they move together with some exception,\u201d says Murshed Chowdhury, a University of New Brunswick assistant professor with a PhD in economics.<\/p>\n<p style=\"text-align: justify;\">\u201cOften US rate changes lead to our rate change. Also, we are mutually dependent, therefore, a change in the US rate will definitely influence the Canadian rate in the same direction,\u201d he adds.<\/p>\n<p style=\"text-align: justify;\">RBC Senior Economist Josh Nye suggests a crumbling US or global economic outlook could eventually spur a cut, although there is an argument to keep rates flat beyond the coming week.<\/p>\n<p style=\"text-align: justify;\">\u201c[U]nless we see further, substantial currency appreciation, I don\u2019t think financial conditions will tighten enough for the BoC to need to offset that with rate cuts of their own,\u201d he says.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.livabl.com\/2019\/07\/canadian-interest-rates-heading-cut.html\" target=\"_blank\" rel=\"noopener noreferrer\">Experts Agree Canadian Interest Rates are Heading for A Cut<\/a> by Josh Sherman | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Most experts anticipate that the next time the Bank of Canada adjusts its policy rate, it\u2019ll make a cut. So suggests a recent survey of 14 economic researchers, who financial-comparison &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2019\/07\/canadian-interest-rates-are-heading-for-a-cut\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-13105","post","type-post","status-publish","format-standard","hentry","category-mortgage"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Canadian Interest Rates are Heading for A Cut &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2019\/07\/canadian-interest-rates-are-heading-for-a-cut\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Canadian Interest Rates are Heading for A Cut &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"Most experts anticipate that the next time the Bank of Canada adjusts its policy rate, it\u2019ll make a cut. 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