The Bank of Canada maintained it’s overnight rate today leaving variable mortgage & line of credit rates unchanged.
The Bank did however announce it will be reducing it’s Quantitative Easing from it’s current $3 billion weekly to $2 billion weekly. As these purchases ease there is added pressure for fixed mortgage rates to increase.
Quotes from today’s press release:
“This adjustment reflects continued progress towards recovery and the Bank’s increased confidence in the strength of the Canadian economic outlook.”
“The global economy is recovering strongly from the COVID-19 pandemic, with continued progress on vaccinations, particularly in advanced economies. However, the recovery is still highly uneven and remains dependent on the course of the virus.”
“In Canada, the third wave of the virus slowed growth in the second quarter. However, falling COVID-19 cases, progress on vaccinations and easing containment restrictions all point to a strong pickup in the second half of this year.”
“Consumption is expected to lead the recovery as households return to more normal spending patterns, while housing market activity is projected to ease back from historical highs.”
“The aftermath of lockdowns and ongoing structural changes in the economy both mean that estimates of potential output and when the output gap will close are particularly uncertain.”
“inflation is likely to remain above 3 percent through the second half of this year and ease back toward 2 percent in 2022.”
“We will continue to provide the appropriate degree of monetary policy stimulus to support the recovery and achieve the inflation objective [of 2%].”
Contact your mortgage professional for tailored advise to navigate the changing market.
FOR THE BANK OF CANADA FULL PRESS RELEASE CLICK HERE: BANK OF CANADA ANNOUNCEMENT