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Bank of Canada interest rate changes
Today we saw the Bank of Canada increase the benchmark rate by 25bps, which is now the fourth rate-hike experienced since June 2017. Canada continues to follow the path of US rate hikes and is now sitting at 1.5%. This will cause Canada's big 6 banks to increase their interest rates causing variable mortgages and other variable rate debt to cost more to consumers. While this will hurt Canadian consumers' pocketbooks, we have to remember we are still well below where the historical benchmark rate has been and what has been considered a neutral level. We still believe rates will go higher over the long term, how quick and how often Canada will raise rates are the unknown and we continue to monitor.