Laking Financial

Bank of Canada holds rate at current historic low!

The Bank of Canada announced today that it is maintaining the benchmark rate. While Covid’s 3rd wave slowed growth, our progress in fighting the virus points to strong economic growth for the rest of the year. Consumption is expected to lead the recovery but the pace of that recovery will vary among industries. The pandemic has caused structural changes in the economy which continues to make forecasting uncertain.

The Bank has determined that the recovery will still require extraordinary monetary policy support until slack in the economy is absorbed and the 2% inflation target is sustainably achieved, which they again anticipate will be in the second half of 2022.

The next rate-setting day is September 8th, 2021.

With rates still extremely low, this is a great time to get in touch for a review of your mortgage strategy. It's important to get advice and a professional assessment of your situation if you want to switch your mortgage for a lower rate, need a new mortgage, are renewing, or looking to refinance for debt consolidation, renovations or other large expenditures.

Today’s Bank of Canada announcement, as expected, held the Overnight Rate at 0.25%.

The highlights are as follows:

"The Canadian economy is starting to recover... With economic activity in Q2 estimated to have been 15% below its level at end of 2019, this is the deepest decline in economic activity since the Great Depression, but considerably less severe than worst scenarios presented in April."

"There are early signs that the reopening of businesses and pent-up demand are leading to an initial bounce-back in employment and output. In the central scenario, roughly 40 percent of the collapse in the first half of the year is made up in the third quarter."

full report can be read here: https://www.bankofcanada.ca/2020/07/fad-press-release-2020-07-15/