Bank of Canada interest rate hike dates: Introduction
I have recently written blogs on debt help and signs you need bankruptcy help. I have ended recent blogs with a question: “Are you worried that the future interest rate hikes will make presently affordable commitments entirely unmanageable?”. So, I thought I would write this blog on Canada interest rate hike dates and what it all might mean in 2019.
Bank of Canada interest rate hike dates
The Bank of Canada (BoC) scheduled dates for the interest rate announcements for 2019 are as follows:
- January 9
- March 6
- April 24
- May 29
- July 10
- September 4
- October 30
- December 4
Bank of Canada interest rate hike dates: 2018
In 2018, it was expected that the BoC would raise interest rates slowly towards the end of 2018 and into 2019. The BoC has actually hiked its trendsetting rate of interest, which affects borrowing expenses across the economic climate, five times since the mid-2017, up from a reduced amount of 0.5 percent. The BoC interest rate stands at 1.75%. It was raised to that level in October 2018 and has not risen since.
Bank of Canada interest rate hike dates: 2019 issues
So the BoC on March 6, 2019, decided to keep its target for the overnight rate of 1.75%. Let me explain the main reasons why.
First, there is a slowdown in the worldwide economic climate. It has actually been extra obvious and more widespread than what they were preparing for. It is much more obvious and a lot more widespread than what the BoC was projecting as recently as January 2019! The higher adverse impact on the global economic situation affected their choice.
Second, global trade stress and unpredictability are weighing heavily on self-confidence and economic activity. There is tension worldwide on the trade front between several different scenarios, including Brexit and nations. This results in weakened consumer self-confidence and the confidence of the total worldwide economy. If the China/USA trade war is settled, the world economic scene might improve a bit.
Domestically in Canada, there are reasons they required to keep the BoC rate where it was:
- Exports fell short of expectations.
- Business investment did not reach the anticipated level.
- Consumer spending was weak.
- The housing market was soft.
Consumer spending is a big part of GDP and the cost of living in Canada. As well it has a huge influence on the Canadian economy. The Canadian real estate market is a high ticket item and there are plenty of industries that are affected by and depend upon a vibrant housing market. Each of those measures was either short of expectations or soft on its performance.
Based on both these worldwide and made in Canada influences that I have pointed out, the BoC determined they were going to keep their interest rate and not hike it. As recently as October 2018 the financial press was reporting that rates will gradually be climbing throughout 2019. Increased unpredictability is now introduced on the timing of future rate increases.
What about the rest of 2019
We might now go all of 2019 without any price rise. It depends on future occasions. I believe that there are four main variables to watch:
- Canadian real estate spending;
- consumer spending;
- the Canadian oil market; and
- global trade.
Core inflation continues to be near 2 percent. The Canadian consumer price index reduced to 1.4 percent in January, greatly as a result of lower oil prices. The BoC expects the cost of living index to be somewhat below the 2 percent target for the majority of 2019, reflecting the influence of short-lived variables, including the drag from reduced energy prices and a bigger output gap.
We will certainly see exactly how some of these variables may transform between now and the spring. For the July and succeeding rate statement dates, we will certainly have to see what the spring real estate market looks like. As I stated above, the real estate market is a large driver of both housing spending as well as consumer spending.
What it means for you
The reality is that the BoC overnight rate holding firm is great information if you were going to be buying a house this year. Five year fixed mortgage rates have actually declined somewhat in 2019.
If you have a variable rate home mortgage or line of credit/home equity credit line, the rate hold is likewise excellent news for you.
What about you?
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