As was widely expected, the Bank of Canada left the target overnight rate unchanged this morning at 1.75%, where it’s sat since October 2018.
The Bank noted a few positive developments, but focused more on the downside risks.
“The global economy is showing signs of stabilization, and some recent trade developments have been positive,” reads the statement. “However, there remains a high degree of uncertainty and geopolitical tensions have re-emerged, with tragic consequences.”
The Bank gave little indication about future monetary policy, saying only: “In determining the future path for the Bank’s policy interest rate, Governing Council will be watching closely to see if the recent slowdown in growth is more persistent than forecast. In assessing incoming data, the Bank will be paying particular attention to developments in consumer spending, the housing market, and business investment.”
Bond yields, which lead fixed mortgage rates, fell strongly following the announcement. That suggests further drops in fixed mortgage rates aren’t out of the question.
As of today, fixed-rate terms can be found for less than most variable-rate mortgages. Click here to search today’s lowest rates.
For variable-rate mortgage holders, the odds of a 25-bps rate cut by the end of the year went from a 50-50 chance this morning to highly probable, according to market forecasts following the rate announcement.