7 May

Mixed reports on rate increases.


Posted by: Chris Cavaghan

With the chaos in Greece the world is thinking the problems may not be over and increasing rates may not be the best idea.

The Canadian economy created 108,700 jobs last month, more than four times as many as expected. This is the largest monthly gain on record, this should cause the Bank of Canada to think strongly about increasing rates.

The Financial Post is suggesting no increases and the Globe and Mail is suggesting increasing sooner than later.

The official word from the Bank of Canada is that they are not guaranteeing they will hold their lending rate until July.

Whether the Bank of Canada increases rates in June or July, it looks like the predictions from the big banks on a hard and fast increase may have been premature.

We still seem to be in a time where all long term predictions only last a couple months or even weeks.

The bond market has slumped a little this week due to the European situation and one lender has decreased their 5 year rate, but seeing 5 year rates below 4% again is very unlikely,

A slow increase over the next 2 years may be what we see.