Well it looks like interest rates are NOT going to rise!
According to Stephen Poloz (Governor of the Bank of Canada) interest rates will likely be delayed because of the Canadian economy struggling to gain any kind of momentum.
Mr. Poloz acknowledged that the Central Bank's current projection the economy will get back to full capacity near the end of 2017 may be to optimistic.
For current homeowners this is good news, mortgage rates will remain low. Unfortunately this will mean that Canadians will have to work longer and save more, while companies must get used to generating significantly lower returns on their investments.
Poloz said “This is about much more than monetary policy, there are big, long-term, global forces acting on interests, and people need to understand them.”
For first time home buyers the low interest rates will not help housing affordability. These rates will also effect retirement plans.
Mr. Poloz also warned that individual Canadians and businesses need to gird themselves for interest rates that are likely to stay “lower for longer.”
“We cannot just sit back and wait for these slow-moving forces to reverse,” he argued. “People and companies, investors and savers, all need to understand these forces and make adjustments.”
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