Posts from the ‘Monday Morning Mortgage Rate Updates’ Category

The futures market is now giving 94% odds that the U.S. Federal Reserve will raise its policy rate when it next meets on December 13, 2016. While there is still much debate about whether the U.S. economy is ready for higher rates, the Fed seems determined to follow through, if only to restore some policy flexibility for fighting the U.S. economy’s next recession. This sets up an interesting test for Government of Canada (GoC) bond yields, which have moved in virtual lockstep with their U.S. equivalents since the start of the Great Recession in 2008.

In a little over a week, on Wednesday, November 30, the next round of mortgage-rule changes will take effect, and while we can’t predict exactly what the impacts will be for every lender, we do know that our mortgage market will begin to look different.

The growing consensus that a Trump presidency will lead to higher bond yields, and by association higher mortgage rates, has me scratching my contrarian itch.

Last Tuesday, TD Canada Trust increased its mortgage prime rate (which is the rate that it uses to price its variable-rate mortgages) from 2.70% to 2.85%. In today’s post, I’ll provide a quick example to illustrate the impact of this change, and offer an insider’s point-of-view on why there was more to it than first meets the eye.

In future, instead of relying on the traditional Consumer Price Index (CPI) total inflation and core inflation statistics, the Bank of Canada will now use three more detailed measures called CPI-common, CPI-trim and CPI-median. Today's post explains.

The most recent MPR was best summed up by BoC Governor Poloz during his press conference, when he said that the report forecasted “a lower profile for economic growth, an extended period of economic slack, and a later return of inflation to the 2% target.” His statement, at the accompanying press conference, provided us with another example of the Bank’s favourite monetary-policy tool of late: jawboning.