After increasing by 1.4% in the first quarter GDP grew by another 0.5% in the second quarter. This is well below the expected 2.5% by many analysts. It is no wonder: while the unemployment rate has dropped it seems that things aren’t chugging along as robustly as some may think. The USA is still in turmoil from an economic standpoint, and our exports are suffering. Hopefully our manufacturers are using the high Loonie to purchase equipment to make them more efficient.
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GDP Below Expected
September 2nd, 2010Fixed Rates on the Downturn
August 16th, 2010Fixed Rates are coming down but the best rates are available based on credit, income, property and down payment criteria. Some lenders will give clients a 120 day rate hold of 4.19% for a 5 year fixed rate term, and some are giving lower rates depending on the size of mortgage, closing date, and limited features. We will probably see 5 year fixed rates settle in the high 3 per cent range as more and more economists and consumers predict the US is going to slip into another recession or suffer deflation.
Federal Reserve Bank to buy U.S Treasuries
August 4th, 2010The mere indication that the US Federal Reserve Bank is toying with the idea of buying US Treasuries has sent bond yields downwards. This in turn will push Canada bond yields lower and will make fixed mortgage rates drop. It is highly likely that we are going to see fixed rates remain close to these current levels (+/- 0.25%) for some time due to uncertainty in the markets. Within the next week expect most banks to lower their rates on fixed rate mortgages by 0.1% – 0.2%.
How U.S Rates can Affect Canada
July 30th, 2010I like it when people get off the fence, particularly when the people getting off the fence are economists.
In The Milken Report (www.milkeninstitute.org) Ross DeVol states that the US economy will add approximately 2 million jobs in 2010 and 3 million jobs in 2011, and that GDP will grow by 3.5% in 2010 and 3.7% in 2011. He continues by stating that he believes inflation will remain low, and that the bulk of the improvement in employment and GDP will be spurred on by the Fed keeping rates at record lows throughout 2010 and into 2011.
A RISE IN RATES
July 28th, 2010On Tuesday of last week The Bank of Canada raised its overnight lending rate by 0.25%. Surveys showed that economists were split in their projections of whether the Bank would raise rates or not, citing a variety of reasons either way.