With a rate hike in the bag for next Wednesday, is there enough positive economic activity to have the Bank of Canada nudge rates by 1/2 per cent instead of the expected 1/4?
The answer is probably yes, but the bank will remain conservative and only bump a quarter so as not to spook the markets.
However, Friday’s robust jobs report certainly gives them enough ammunition to raise again in short order this fall, and this could lead to further hikes in both variable and fixed rate mortgages.
The Royal Bank of Canada has already pre-empted Wednesday’s rate hike by raising fixed rate mortgages by 20 basis points on two, three, and five-year mortgages.
But, if the Bank of Canada is aggressive in their statement next Wednesday, accompanying the interest rate hike, mortgage rates could go up again, and much faster, even without a further rate hike by the central bank.
Don’t forget to join Michael Levy this Saturday at 8:45 a.m. where he will join Michael Campbell on CKNW’s Money Talks to discuss impact of higher rates.