At the December 7th meeting, the Bank of Canada is officially done rising rates … for this year, that is.
As expected, the BoC raised the overnight lending rate by a relatively modest 0.50%. 📈 This increases variable mortgage rates by $25 for every $100K of mortgage, so an $800K mortgage will increase by $200/month 👉 Justifying their decision, the Bank pointed to high global and broadly-based inflation as the primary reason for the continued policy rate increase.
What was interesting in this report is that there was no mention of “higher interest rates being required in the future.” This leads me to believe that the Bank feels that they are done for now. They believe that the economy will be flat through the end of this year and the first half of next year. Future rate hikes are not off the table, but they are now in wait-and-see mode.
Has the Bank gone too far? Do you think we have seen the last of the rate hikes? Let me know what you think!
