QUOTE (JamesB @ Mar 25 2010, 08:06 AM) I think a lot of it will rely on how fast the U.S. economy bounces back. If we raise our interest rates, the Canadian dollar will become more powerful than the us dollar. (Sounds great for x boarder shopping, but would be terrible for our economy) The issue is our exports and manufacturing sector will hurt. (Oil in Alberta, Automotive, Mining etc.)
I see rates staying low for many years. (At least historically speaking) Rates will rise, but I think that variable is the way to go still! Rates will move up in the near term, but I doubt they will continue to move up. (If they do, it will be a great time to get your fancy cars from the US)
I share this view 100% !
Economies are still way too fragile in US and also in Canada for any significant BofC prime rate moves .. and still so much money on the sidelines that even 5 or 10 year rates will remain fairly low !
Also keep an eye on the US-China relationship that will probably turn uglier due to allegations of "currency manipulations", "product dumping", "environmental pollution" .. so I expect the US to tighten severely the imports by China into the US and thus, slower worldwide growth, thus more sluggish Canada economy too .. thus: continued low interest rates !!!!