Steve Flynn  RE/MAX Crest Realty- Burnaby 

Cell: 604.785.3977 |


Bank of Canada Interest Rate Announcement - September 7, 2016

The Bank of Canada announced this morning that it is holding its target for the overnight interest rate at 0.5 per cent. In the press release accompanying the decision, the Bank noted that weaker than expected growth in the global economy, and in particular in the US economy, has hurt Canadian exports and business investment in the first half of the year. On inflation, the Bank noted that total CPI inflation is below its 2 per cent target mainly due to temporary effects of low energy prices while core measures of inflation remain on target. Overall, the Bank judges risks to the economy and the profile for inflation as somewhat tilted to the downside, pointing out a possible moderation in the Vancouver housing market and financial vulnerabilities associated with high household debt. 

A second quarter contraction in GDP resulting from disruptions caused by Alberta wildfires should give way to a strong recovery in the second half of the year. We expect Canadian economic growth will rebound sharply as oil production normalizes and the federal government's uptick in expenditures and tax credits impacts the economy. With growth recovering and core inflation trending at or above the Bank's 2 per cent target, the Bank of Canada will very likely leave its policy rate unchanged for the foreseeable future. That said, even absent a change in the Bank's stance on monetary policy, mortgage rates may be moved modestly higher if the US Federal Reserve, as it recently signaled,  raises its own policy rate this fall.  

Copyright British Columbia Real Estate Association. Reprinted with permission.

No comments

Post Your Comment:

The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.