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Bank of Canada July 2025 – NO CHANGE
/in Misc. /by adminHere are the highlights:
Rates unchanged this morning by the Bank of Canada.
As unpredictable trade policy still plagues the economy, instead of offering base case projections for GDP & inflation, the Bank of Canada mapped out two ends of the tariff scenario – escalation vs de-escalation (a Mr Miyagi, “tariff on” “tariff off” outline, if you will).
I can sum up their insightful analysis as, more tariffs equal shrinking economy & higher inflation. Reduction in tariffs equal moderate growth & lower inflation. Not exactly boiling the ocean here but this does affirm what everyone’s been thinking all along.
In the current tariff scenario, they see an anemic 1% growth in the 2nd half of this year with growth gradually grinding up to a moderate 2% by 2027. Inflation, in that scenario, is expected to stay around 2% as the upward & downward pressures offset each other.
The Bank did hint that if growth falls & inflation remains contained they will look to reduce rates, so to be determined..
In terms of where rate forecasts are sitting, not much has changed as the big banks still all expect another 0.5% in cuts this year with scotia being the outlier at a 0.25% reduction in 2026.
We shall see.
That’s it for me, thanks for watching & have a great morning.
Bank of Canada Rate Announcement – June 2025 – NO CHANGE
/in Misc. /by adminHere are the highlights:
The Bank of Canada has left rates unchanged for a second consecutive meeting, leaving prime rate at 4.95%.
While there are more Bank of Canada cuts being expected this year, rising core inflation & better than expected GDP has given enough cause to pause & save those cuts for economic decline coming later this year.
Tariff uncertainty remains high. The global economy & Canada’s economy has held up over the last few months, however that’s largely due to a temporary surge in activity – rushing in orders & stockpiling inventory – to get ahead of tariffs.
That said, consumption has slowed, business investment & confidence is down & housing is at some of the lowest levels since the depths of the pandemic, and this is expected to be the most robust quarter for growth this year – eesh!
On the inflation front, CPI eased to 1.7% in April as the elimination of the carbon tax reduced inflation by 0.6%. The Bank’s preferred measure of core inflation, however, has moved up & is above target. That likely had a large impact on why the Bank hit pause today.
Core inflation excludes certain volatile components & can reflect underlying, longer term trends in the economy.
Consumers are expecting higher prices from the tariffs. When consumers are expecting higher prices, business are more able to pass on price hikes & inflation can continue to pick up & managing that, ultimately, is the Bank of Canada’s mandate.
So, overall, more Bank of Canada cuts are expected, fixed rates may be at the bottom & if you have a renewal coming up & we have not connected, get in touch today.
Bank of Canada – April 2025 – NO CHANGE
/in Misc. /by adminInterest Rate Hold:Bank of Canada held interest rates, maintaining Prime Rate of 4.95%This is the first meeting they’ve held rates since April 2024The total number rate cuts this cycle is at 2.25%.
Economic Indicators:inflation lower than expected at 2.3% for MarchCAD strengthened vs USD over the last monthConsumer confidence at an all time lowHome sales plummeting as tariff concerns remain
Job Market:March report was weaker than expected with negative job growth (0.2%)Layoffs starting in Auto sector as a result of trade warUnemployment up 0.1% to 6.7%
Forecasts:5 of the 6 Big Banks forecast further rate cuts in 2025:0.5% – 0.75%
Next Bank of Canada Meeting:Scheduled for June 4th, 2025https://bbemaildelivery.com/bbext/?p=vidEmbed&id=36024853-8AB1-4FE3-A120-E2ACB4FFCE3A&ar=0&ignore_view=1&videoPlayerId=5d66952e-e212-976d-2301-585a57e910c5
The Bank of Canada held rates this morning. This is the first time they have not lowered rates since April of last year.
Much of the release this morning highlighted the uncertainty of the trade war, as Trump continues his Mr Miyagi routine of tariff on, tariff off. Whether you’re a business or individual, it’s tough to stomach deploying capital in an uncertain environment & we’re seeing that follow through in the housing market. It’s a great time to be a buyer, not so great if you need to sell. Business confidence, employment, consumer & business spending are all on the decline, & that’s reflected globally with falling oil prices.
The Bank of Canada outlined 2 scenarios with the trade war:High uncertainty but tariffs limited in scope: Growth weakens temporarily & inflation remains on 2% targetProtracted trade war: causes Canada to enter recession & inflation rises temporarily above 3% in 2026Both pills spell trouble for the economy & is likely to result in further cuts throughout the year.
I think what a lot of people don’t understand is that Bank of Canada rate cuts don’t have a direct correlation to fixed rates. Over the past year they’ve cut rates 2.25% but over that time the 5 year fixed has only come down 1% – 1.5%. Rate cut don’t mean ALL rates come down.
The current expectation is that fixed rates might get a bit better this year, rising into next & the range of big bank expectations for Bank of Canada cuts in 2025 (ie: variable rates) range from no further action (<–Scotia is the outlier) to 0.5%-0.75% (everyone else).
Tiff Macklem, like everyone else, can only wait to see what unfolds but what matters most right now, to you & your mortgage, is having the long-term protection & oversight that we’ve built into our business.
If you have a renewal coming up in the next year, get in touch with us today so we can make sure you don’t miss out on any opportunities.
Bank of Canada Cuts Rates 0.25% – March 2025
/in Misc. /by adminHere are the highlights:
The Bank of Canada has cut interest rates for the 7th consecutive meeting, bringing down Prime from 5.2% to 4.95% & lowering all variable rate mortgages & lines of credit. This brings the total number of cuts to 2.25% since they started in June. Will we get more?
If you ask the big bank economists, the majority say yes, and if the trade war hangs around, we could more than expected.
And so why is that? Don’t tariffs raise prices & inflation? Isn’t that what the Bank of Canada was fighting so hard to fix?
Tariffs can certainly impact prices as the cost of imported goods & raw materials goes up, competition gets reduced & supply chains get disrupted. The 2018 tariff war between the US & China impacted US inflation by the tune of 0.5%.
The bigger concern here at home, though, is the potential impact on growth. Canada has been dealing with a productivity crisis. To fix that you need business investment & if you’re a business, you’re probably looking to take risk off the table right now & NOT make any major investments. You’re probably concerned about the impact to consumer spending so are looking to cut costs right now & that can mean job losses, weaker GDP.
If the trade war sticks, our per capita recession will likely turn to AT LEAST a mild overall recession. Recent falling equity prices & bond yields reflects that expectation. The looming threat alone will result in weaker North American growth.
So yes, tariffs can lead to higher prices but the bigger concern is a recession, which would lead to lower rates.
That’s it for today. If you or any friends or family have a mortgage coming up for renewal this year please get in touch so we can make sure you aren’t missing out on any opportunities.
Bank of Canada cuts rates 0.25% – Jan 2025
/in Misc. /by adminHere are the highlights:
Interest Rate Cut: Bank of Canada cut interest rates by 0.25%, lowering Prime Rate from 5.45% to 5.2%, the sixth consecutive cut.This brings the total rate cuts to 2% since June.
Economic Indicators: inflation down in December from 1.9% to 1.8%GST break helped bring inflation down but will have a reverse effect on future monthsCanadian dollar continues to depreciate vs USDTrade conflict could lead to weaker GDP & higher prices
Job Market: Dec jobs report the best in years91k job gains (40k from public sector)Unemployment drops slightly from 6.8% to 6.7%
Forecasts: 5 of the 6 Big Banks forecast further rate cuts in 2025:range from another 0.5% – 1%Scotia is the outlier seeing no more rate cuts
Next Bank of Canada Meeting: Scheduled for March 12th, 2025
The Bank of Canada has dropped rates by 0.25% at this morning’s rate announcement, the sixth consecutive cut for a total of 2% since they began in June.
Today’s release began with a big disclaimer — all forecasts are out the window depending on what happens with this pending trade war. All eyes are on the cheeto in chief & what will happen with these threatened tariffs.
While the short term impact would be inflationary, long term implications would not be good — potential layoffs, reduced spending & economic slowdown would amplify recession concerns. Over 70% of Canada’s goods & services are sold to the US so some big potential implications here.
On the inflation front, December CPI dropped again from 1.9% to 1.8%. The GST exemption helped bring down prices but that can setup for the reverse effect on inflation in the coming months.
Onto jobs, the December employment data was a big print & the strongest in years — over 90,000 net new jobs, increase in the employment rate & decrease in unemployment.
In terms of what’s to come in 2025 for rates, 5 of the 6 big banks in Canada are expecting anywhere from another 0.5% – 1% in cuts for the year with Scotia being the outlier calling for no further cuts.
REFINANCE ALERT:
There is still a sweet spot right now with how mortgage penalties are calculated where ANYONE WHO OBTAINED A FIXED RATE MORTGAGE BETWEEN FALL LAST YEAR TO SPRING can likely refinance into lower rates & save a significant amount of interest. If you have any friends or family who got a mortgage during that time frame, get in touch before this window of opportunity gets taken away.
The next Bank of Canada meeting is March 12th, 2025.
For more updates and insights, follow @zupanmortgages on Instagram for daily content.
Bank of Canada JUMBO cut – 0.5%
/in Misc. /by adminHere are the highlights:
Big news out of the Bank of Canadathis morning. Tiff & his merry band of bankers have followed the US Fed with a 0.5% rate cut. That brings a total of 1.25% since June & isn’t to be the last.
While a jumbo cut is welcomed news to borrowers, the not so great reality is that they wouldn’t be doing that if things were rock & rolling.
In the release The Bank noted subdued GDP growth in the 2nd half of this year, slightly better for next, but well below the expected 3% global growth. Declining consumption on a per person basis & soft labour market with unemployment running at 6.5% are clear signs the stifling interest rate environment are too restrictive.
Inflation has finally subsided to fall within the acceptable range with last month’s print coming in at 1.6%, but don’t count inflation totally out for dead. Commodity prices picked up surrounding the US FED’s somewhat surprising jumbo rate cut last month & bond yields overall being higher than the summer.
There is 1 more rate meeting to close out the year coming up in Dec. The market is expecting another 1% in cuts by the end of next year.
The next Bank of Canada meeting is December 11th, 2024