As expected, the Bank of Canada held its overnight rate at 5 per cent this morning. In the statement accompanying the decision, the Bank noted that economic growth stalled through the middle quarters of 2023 and that slowdown in growth is expected to extend into the fourth quarter.

As a result, inflationary pressure is easing, though the Bank stated that it is still concerned about risks to the outlook for inflation and wants to see a sustained easing of core inflation in future months. Given the evidence of a slowing economy and some long-awaited downward momentum in core inflation, it appears likely that the Bank of Canada’s rate-tightening cycle is at an end. If so, the conversation around Bank of Canada meetings in 2024 will shift toward when the…

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Hawkish Hold By The Bank of Canada The Bank of Canada today held its target for the overnight rate at 5%, as was widely expected. The central bank continues to normalize its balance sheet through quantitative tightening, reducing its Government of Canada bonds holdings.

The Monetary Policy Report (MPR) detailed a slowdown in global economic growth “as past increases in policy rates and the recent surge in global bond yields weigh on demand.” Continued increases in longer-date bond yields reflect the stronger-than-expected growth in the US, where the Q3 economic growth rate, released tomorrow, is expected to be a whopping 5%. Ten-year yields in the US have risen to nearly 5%, boosting fixed mortgage rates in Canada.

Oil prices are higher than was…

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Increasing Mortgage Rates Weighed Heavily On Housing In September Mortgage rates continued to rise in September after BoC tightening and one of the largest bond selloffs in history.

Yields have retraced some of their rise more recently, but demand for new and existing homes has slowed. According to data released by the Canadian Real Estate Association, national home sales declined 1.9% m/m in September, its third consecutive monthly decline. At least September's drop was about half as large as in August, dominated by weakness in the Greater Vancouver and the Greater Toronto Area.

Sales gains were posted in Edmonton, Montreal, and the Kitchener-Waterloo region. The actual (not seasonally adjusted) number of transactions in September 2023 came in 1.9%…

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As we round the corner into October, now is a great time to touch base about what to expect in the marketplace this Fall!

As you may have heard, The Bank of Canada opted to maintain its policy rate at 5% as of September. The recent rate hikes over the spring and summer have slowed the housing and mortgage markets as potential buyers were unsurprisingly spooked by the rise in mortgage rates.

More recently, fixed-rate loans have become more expensive because of the rise in longer-term interest rates. As a result, housing affordability became a bigger hurdle and led to a slight decrease in home prices by 6% in major markets over the summer.

With The Bank of Canada currently maintaining the 5% policy rate, many hope this will be the peak in overnight…

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