Big bank offers rate prediction

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Brokers – and Canadians in general – await the Bank of Canada rate decision, which is set to be released later today, and one Canadian bank believes it will maintain the current 0.5% benchmark.

“All told, our current tracking is for real GDP growth to run around the 2-2.5% range over the second half of this year. This growth trajectory is consistent with the profile outlined by the Bank of Canada in its July Monetary Policy Report,” TD writes in its latest Weekly Bottom Line report. “As a result, we expect the Bank of Canada will leave the overnight rate unchanged at next Wednesday’s interest rate announcement.”

It’s a decision that will likely be welcome by brokers. A decrease to the overnight benchmark – which some of have considered a possibility – could stir public worries about the state of the economy. That economic volatility, of course, would discourage many buyers from making large purchases, such as homes.

TD is the second bank to maintain the BoC would hold its rate.

“We expect the Bank of Canada to remain on hold on Wednesday with the overnight rate unchanged at 0.5%,” Derek Holt, vice president of Scotia Economics, writes in the bank’s latest economic forecast. “It will be a statement-only affair with no forecast updates or press conference.

They will come next in October.”

Meanwhile, 40 leading economists suggest there will be no change later today, according to BNN. Analysts forecast the chance of a hike at 55%, but not until 2017.
 
  • kac on 2015-09-09 5:41:41 PM

    in reality the lower the rates go the tougher it is and will be to be approved for mortgages,the feds will surely implement more stringent guidelines to access mortgages,the winners will be the chartered banks who will still make it very easy to access loc's and auto loans and visas which is their bread and butter and the monolines will remain as they currently are gate keepers to mortgage funds,the equity lenders will have a lot of quality covenants to deal with in heavily populated municipalities and the individuals that live in outlaying area's and that have little equity will continue to be absorbed with the easy credit to get which is the unsecured until they run out of lenders to dish them out this credit.

    The economy sure seemed to do a lot better when rates were higher and the majority of consumer debt was that of secured debt.

    just my opinion of course.

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