03/02/2022
The Bank of Canada announced today that it has raised the overnight rate by .25% to .50%, to help curb a worsening inflation picture owing to global supply chain bottlenecks, labour shortages and rising energy costs. Canada's surging inflation rate moved to a 30 year high of 5.1% recently, driven by high gas prices, soaring housing and automobile costs and rising food prices and this is well above the Bank of Canada’s target rate of 2% that it had hoped to maintain.
The Bank of Canada owns approximately 42% of Canada's sovereign debt and has also signaled it will start to shrink its balance sheet by allowing maturing bonds to roll off without reinvesting the funds, this is called quantitative tightening.
Expect more rate hikes throughout 2022 from the Bank of Canada. Recall that just over three years ago the overnight rate, in October of 2018, was 1.75%.
The next rate-setting day is April 13th, 2022.
Now is the time to get in touch for a review of your mortgage strategy. It's important to get advice and a professional assessment of your situation if you want to switch your mortgage for a new rate, need a new mortgage, are renewing, or looking to refinance for debt consolidation, renovations, or other large expenditures.
