BANK OF CANADA RATE UPDATE
The Bank of Canada seems to be getting in the holiday spirit as it opts to maintain the target for the overnight rate at 1%.
While the Bank acknowledged, in its recent release, that interest rate hikes are likely in Canada’s future, its standing pat for now largely because of uncertainty surrounding geopolitical developments and trade policies. Inflation is also slightly higher than the bank previously anticipated and is expected to increase more-something the bank attributes to temporary factors such as rising gasoline prices.
When the time comes to raise interest rates, the Bank says it will do so cautiously, with the country’s sensitivity to interest rates in mind. On that note, if you’re a variable rate mortgage holder, it couldn’t hurt to prepare for an increase by adding a little bit to your payment now. Think of it as an early Christmas present to yourself!
The next Bank of Canada interest rate announcement is scheduled for January 17, 2018. You can read the current release here: http://www.bankofcanada.ca/2017/12/fad-press-release-2017-12-06/.