[QUOTE=codfather;5367839]
Quote:
Originally Posted by kevman
It's a start... I'd still like to see the final 10bps. QUOTE]
I've seen this posted in a couple of the sub-forums but not here so I figured I'd bump this. The Bank of Canada has dropped their overnight lending rate by 0.25%.
Kevman has finally gotten his wish as TD has announced a drop to their rate by the final 0.1% they didn't give during the last cut. Unfortunately this means they are keeping the full 0.25% from this cut... I haven't heard anything about the other banks yet so we'll see what they do, but I'm guessing they'll follow TD's lead.
http://www.cbc.ca/news/business/bank...-low-1.3152673
Given that the banks have been doing fine, I'm having trouble understanding why the Bank of Canada would cut the rate. Given what happened last time, it really shouldn't be surprising that the banks have not passed this savings along to consumers. I guess it did incentivize at least TD to drop their rate by the 0.1% missed last time but they've gained 0.25% on their spread overall. When the Bank of Canada starts increasing rates again, a lot of gears are going to grind when the banks follow suit. |
BoC cut the rate as Canada is technically in a recession now - lower GDP for 2 straight quarters.
IMO it is a myopic move, as yes, this could help increase consumer spending, but it looks to me like it will be more artificial spending - it will help inflate real estate values (cheaper mortgage = people paying more for the same place with same monthly payments), but with the Canadian population already drowning in debt, this looks like throwing some crack out into the middle of East Hastings & Main... I personally don't see this ending well.
Not to mention that they are going to completely tank our dollar.