{"id":17550,"date":"2021-03-16T10:10:00","date_gmt":"2021-03-16T17:10:00","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=17550"},"modified":"2021-03-11T09:23:39","modified_gmt":"2021-03-11T17:23:39","slug":"bank-of-canada-rock-bottom-rate-level-increases-not-expected-until-2023","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2021\/03\/bank-of-canada-rock-bottom-rate-level-increases-not-expected-until-2023\/","title":{"rendered":"Bank of Canada Rock-Bottom Rate Level Increases Not Expected Until 2023"},"content":{"rendered":"

It\u2019s been over a year since the Bank of Canada first cut its influential overnight rate to counter the economic fallout brought on by the worsening COVID-19 pandemic.<\/p>\n

Another dramatic pair of cuts both in March 2020 brought the mortgage-market influencing rate down to 0.25 percent, a level that the bank describes as its \u201ceffective lower bound.\u201d<\/p>\n

Now, a year later, the central bank has a new leader \u2014 Tiff Macklem replaced Stephen Poloz as governor last summer. However, its rock-bottom overnight rate has remained the same. During one of its regularly scheduled rate announcements, the bank left it unchanged and stated that it would remain low until the economy hits several key improvement benchmarks.<\/p>\n

According to the central bank, that\u2019s not expected to happen until sometime in 2023. This means that consumer lending rates \u2014 including mortgage rates \u2014 could increase from their current record-low levels during this two-year period, but they\u2019re unlikely to rise substantially. This in turn will set the stage for homebuyers to continue taking advantage of low mortgage rates for some time to come.<\/p>\n

Low mortgage rates, and the homebuying frenzy they\u2019ve done much to inspire, have become a hallmark of the post-spring 2020 pandemic. Today, Google Canada published Google Trends data that showed online searches for mortgages had reached a five-year high over the last year, with \u201cHow much mortgage can I afford\u201d and \u201cHow to get pre approved for a mortgage\u201d identified as top search terms.<\/p>\n

But while the Bank of Canada has not clearly signalled changing its approach to keeping interest rates low for at least the next two years, recent positive economic data could indicate that a shift in thinking might be on the horizon.<\/p>\n

In a research note, TD Senior Economist Sri Thanabalasingam wrote that Canada\u2019s economy grew 9.6 percent in the fourth quarter of 2020, much higher than what the central bank had originally forecast. The economy also appears to be outperforming the bank\u2019s projection for the first quarter of 2021 too.<\/p>\n

\u201cIf data continue to provide upside surprises and the vaccine rollout accelerates, the Bank may be left with little choice but to exit easy monetary policy sooner rather than later,\u201d wrote Thanabalasingam.<\/p>\n

In other words, policymakers at the bank may change course and opt to raise rates before 2023 if economic conditions continue to improve faster than anticipated.<\/p>\n

Bank of Canada Keeps Interest Rate at Rock-Bottom Level, Increases Not Expected Until 2023<\/a> by Sean MacKay | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s been over a year since the Bank of Canada first cut its influential overnight rate to counter the economic fallout brought on by the worsening COVID-19 pandemic. Another dramatic … [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-17550","post","type-post","status-publish","format-standard","hentry","category-mortgage"],"yoast_head":"\nBank of Canada Rock-Bottom Rate Level Increases Not Expected Until 2023 • 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\/2021\/03\/bank-of-canada-rock-bottom-rate-level-increases-not-expected-until-2023\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Bank of Canada Rock-Bottom Rate Level Increases Not Expected Until 2023 • Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"It\u2019s been over a year since the Bank of Canada first cut its influential overnight rate to counter the economic fallout brought on by the worsening COVID-19 pandemic. 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