Will The Bank Of Canada Raise Rates in September
- Thread starter wgraham
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I think that the instability in the EU (optics), slower growth out of China (real) and the start of Seasonal Affective Disorder will let them keep rates low.
There`s little inflationary pressure and housing is slowing by itself from a BOC perspective. They also learned from the US run-up that raising rates isn`t as effective as we`d like to think at slowing the housing markets.
There`s little inflationary pressure and housing is slowing by itself from a BOC perspective. They also learned from the US run-up that raising rates isn`t as effective as we`d like to think at slowing the housing markets.
I am not sure if the rates will raise in September. But I think there will be only one more uplift (of 25 basis points) in 2010. BoC will raise perhaps more slowly than some might have anticipated because I think the economic factors they monitor will suggest a touch more modest growth over the nexyt 6-9 months. Just not a fan of the HST and it sounds like recovery below the 49th will be rather modest as well.
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QUOTE (21krunner @ Aug 2 2010, 03:36 PM)
I am not sure if the rates will raise in September. But I think there will be only one more uplift (of 25 basis points) in 2010. BoC will raise perhaps more slowly than some might have anticipated because I think the economic factors they monitor will suggest a touch more modest growth over the nexyt 6-9 months. Just not a fan of the HST and it sounds like recovery below the 49th will be rather modest as well.
Should they? No, of course not.
Will they? Who knows. The Banks control the BoC.
I am not sure if the rates will raise in September. But I think there will be only one more uplift (of 25 basis points) in 2010. BoC will raise perhaps more slowly than some might have anticipated because I think the economic factors they monitor will suggest a touch more modest growth over the nexyt 6-9 months. Just not a fan of the HST and it sounds like recovery below the 49th will be rather modest as well.
Should they? No, of course not.
Will they? Who knows. The Banks control the BoC.
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QUOTE (ontariolandlord @ Aug 2 2010, 11:06 PM) Should they? No, of course not.
Will they? Who knows. The Banks control the BoC.
Does the sun ever shine in your world, ontariolandlord?
Will they? Who knows. The Banks control the BoC.
Does the sun ever shine in your world, ontariolandlord?
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I think they will stay the same this round but I would like to see them rise. I think if they go up lending rules will relax a bit. Maybe my theory doesn`t make sense but I think if the investment community has access to more profit they will take on more loans.
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QUOTE (MikeMcCrae @ Aug 4 2010, 10:12 AM)
I think they will stay the same this round but I would like to see them rise. I think if they go up lending rules will relax a bit. Maybe my theory doesn't make sense but I think if the investment community has access to more profit they will take on more loans.
How relaxed were the rules & how much did they take on when rates were in the HIGH teens in the early 80's?
I think they will stay the same this round but I would like to see them rise. I think if they go up lending rules will relax a bit. Maybe my theory doesn't make sense but I think if the investment community has access to more profit they will take on more loans.
How relaxed were the rules & how much did they take on when rates were in the HIGH teens in the early 80's?
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Well with the current poll results it would seem that REIN members feel that there is a fair bit of upside risk and no downside. So the question I would like to ask now is what are you doing about it? How are you counteracting the risk that the Bank of Canada will continue its rate hike?
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QUOTE (wgraham @ Aug 10 2010, 11:55 AM)
Well with the current poll results it would seem that REIN members feel that there is a fair bit of upside risk and no downside. So the question I would like to ask now is what are you doing about it? How are you counteracting the risk that the Bank of Canada will continue its rate hike?
In this neck of the woods, the rental market is too fragile to consider raising rents to offset the higher interest rate costs. So cost cutting remains and we're trying to do that on a continuous basis already, i.e. limited opportunity to cut more.
Also, the interest rate increase would only affect people with variable rate mortgages. I understand that new 5 year mortgages, which are not depending on the BoC rate, are actually on the decline or stable.
So... unless your leveraged to the hilt, the increase interest expenses will be limited. An increase on a typical variable of $150K will be $375 per year or $31.25 per month for every 0.25% BoC rate increase. I don't think that is deadly especially if you were anticipating these increases and stress tested your economic numbers.
Also, unless the economy improves rather than double dips or stagnates, the chance of further interest rate increases is limited to non-existent. On the otherhand, if we do get more good economic growth
we should be able to offset increasing rates with increased rental rates.
So no need to panic.
Well with the current poll results it would seem that REIN members feel that there is a fair bit of upside risk and no downside. So the question I would like to ask now is what are you doing about it? How are you counteracting the risk that the Bank of Canada will continue its rate hike?
In this neck of the woods, the rental market is too fragile to consider raising rents to offset the higher interest rate costs. So cost cutting remains and we're trying to do that on a continuous basis already, i.e. limited opportunity to cut more.
Also, the interest rate increase would only affect people with variable rate mortgages. I understand that new 5 year mortgages, which are not depending on the BoC rate, are actually on the decline or stable.
So... unless your leveraged to the hilt, the increase interest expenses will be limited. An increase on a typical variable of $150K will be $375 per year or $31.25 per month for every 0.25% BoC rate increase. I don't think that is deadly especially if you were anticipating these increases and stress tested your economic numbers.
Also, unless the economy improves rather than double dips or stagnates, the chance of further interest rate increases is limited to non-existent. On the otherhand, if we do get more good economic growth
we should be able to offset increasing rates with increased rental rates.
So no need to panic.
QUOTE (jkcomm @ Aug 31 2010, 11:12 AM)
With the world economy still somewhat fragile, I wouldn't expect the rates to go up.
James
I do believe the economy is seesawing up and down... good reports one day... crap the next... but with the recent bout of crap... I think the BoC will probably hold steady taking a wait and see... especially with the possibility of a doubledip recession increasing and not much improvement in the US economic situation...
As for panicking... I'm not sure anyone on this forum is panicking =) Just doing the fun guesstimating of what we think will occur. It should be interesting to see what comes of it... anyone interested in taking side bets? I'm gonna guess rates going down would be the ultimate long shot with the current poll results =) (While holding steady seems to be the majority) I can possibly see one more increase this year at least... maybe we're trying to catch up to Australia?
With the world economy still somewhat fragile, I wouldn't expect the rates to go up.
James
I do believe the economy is seesawing up and down... good reports one day... crap the next... but with the recent bout of crap... I think the BoC will probably hold steady taking a wait and see... especially with the possibility of a doubledip recession increasing and not much improvement in the US economic situation...
As for panicking... I'm not sure anyone on this forum is panicking =) Just doing the fun guesstimating of what we think will occur. It should be interesting to see what comes of it... anyone interested in taking side bets? I'm gonna guess rates going down would be the ultimate long shot with the current poll results =) (While holding steady seems to be the majority) I can possibly see one more increase this year at least... maybe we're trying to catch up to Australia?
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QUOTE (addbo @ Aug 31 2010, 08:37 PM) I do believe the economy is seesawing up and down... good reports one day... crap the next... but with the recent bout of crap... I think the BoC will probably hold steady taking a wait and see... especially with the possibility of a doubledip recession increasing and not much improvement in the US economic situation...
As for panicking... I`m not sure anyone on this forum is panicking =) Just doing the fun guesstimating of what we think will occur. It should be interesting to see what comes of it... anyone interested in taking side bets? I`m gonna guess rates going down would be the ultimate long shot with the current poll results =) (While holding steady seems to be the majority) I can possibly see one more increase this year at least... maybe we`re trying to catch up to Australia?
I think the BOC has more effect with words than actions these days....if they tell people to tone it down....we tone it down. We will only get an increase if things start to really heat up which they certainly aren`t!
Bond rates are down, inflation is certainly in check, down side risks are much more prevalent than upside.....my guess is that we won`t see an increase this year!
As for panicking... I`m not sure anyone on this forum is panicking =) Just doing the fun guesstimating of what we think will occur. It should be interesting to see what comes of it... anyone interested in taking side bets? I`m gonna guess rates going down would be the ultimate long shot with the current poll results =) (While holding steady seems to be the majority) I can possibly see one more increase this year at least... maybe we`re trying to catch up to Australia?
I think the BOC has more effect with words than actions these days....if they tell people to tone it down....we tone it down. We will only get an increase if things start to really heat up which they certainly aren`t!
Bond rates are down, inflation is certainly in check, down side risks are much more prevalent than upside.....my guess is that we won`t see an increase this year!
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My vote is one of the "don`t care" ones, in the sense that a quarter point bump won`t make any significant dent in our cash flow - and we are 100% variable rates.... we were fortunate enough to ride the cash-flow increase and/or equity pay-down increase wave as rates decreased, and are still happy with rates in many cases well below where we originally signed - money is still cheap!
Don Campbell`s teachings of money funnel (and more recently of analysis with higher rates to shock-proof the analysis) have steered us well!
Don Campbell`s teachings of money funnel (and more recently of analysis with higher rates to shock-proof the analysis) have steered us well!
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No rise in rates in September.
QUOTE (wgraham @ Sep 1 2010, 10:18 AM) I think the BOC has more effect with words than actions these days....if they tell people to tone it down....we tone it down. We will only get an increase if things start to really heat up which they certainly aren`t!
Bond rates are down, inflation is certainly in check, down side risks are much more prevalent than upside.....my guess is that we won`t see an increase this year!
QUOTE (wgraham @ Sep 1 2010, 10:18 AM) I think the BOC has more effect with words than actions these days....if they tell people to tone it down....we tone it down. We will only get an increase if things start to really heat up which they certainly aren`t!
Bond rates are down, inflation is certainly in check, down side risks are much more prevalent than upside.....my guess is that we won`t see an increase this year!
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As unemployment in Canada rises.
As the US is looking at a double-dip recession.
As Ontario has a $20 billion dollar deficit.
Who does Carney truly work for?
As the US is looking at a double-dip recession.
As Ontario has a $20 billion dollar deficit.
Who does Carney truly work for?
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- Apr 26, 2010
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- 171
QUOTE (ontariolandlord @ Sep 10 2010, 08:09 PM) As unemployment in Canada rises.
As the US is looking at a double-dip recession.
As Ontario has a $20 billion dollar deficit.
Who does Carney truly work for?
He works for me Muahahahaha
As the US is looking at a double-dip recession.
As Ontario has a $20 billion dollar deficit.
Who does Carney truly work for?
He works for me Muahahahaha