Canadian Mortgage Borrowers To Reduce Consumption Even After Rate Cuts: BoC
Canada’s sharp and unexpected rate hikes will continue to produce damage, even after rate cuts. A new staff research note from the Bank of Canada (BoC) shows the overnight rate is much higher than initially anticipated, reducing consumption for mortgage borrowers since the climb began in 2022. Rates are now being slashed and providing relief, but reduced consumption is seen through 2027.
Canadian Interest Rates Are Much Higher Than The BoC Anticipated
Canadian interest costs climbed significantly higher than the central bank had forecast. Researchers show they anticipated rates would be 2 points lower than the observed peak. This was primarily due to an incorrect call on transitory inflation, and liquidity issues from excess government borrowing. …[Continue Reading]