The Bank of Canada left the overnight rate unchanged at 1 per cent Tuesday, in the process suggesting a hike may not come anytime soon – something that could strengthen OSFI’s hand.
With specific reference to a weakened global economy, the bank review argues "risks remain skewed to the downside,” although the national outlook remains largely unchanged from earlier largely positive projections.
It also stepped back from its warnings about household debt levels and the urgent need to bring that under control.
That move in particular lends weight to the idea that the bank will hold off on any rise in its key overnight rate, say analysts, suggesting the central bank may delay until sometime next year.
Still, some brokers are concerned the absence of any rate tightening will strengthen OSFI’s demands for substantive changes to lender underwriting guidelines.
Those exhaustive changes promise to hold lenders more accountable for their lending decisions, but also threaten, charge some brokers, to compromise homeownership for many current borrowers.
Those changes are expected to be released later this month, with CAAMP and other broker players already having submitted analysis on the proposed guideline changes.