Quote:
Originally Posted by automaton 3
The Bank of Canada is widely expected to raise the prime rate by .25% next month - not great news for new buyers and those with floating rate financing.
There is also some talk about an additional .25% hike later this year (September).
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The bank of canada has to be very careful...it makes exports very expensive with the continued rise of the C$ versus the USD.
I am not sure where you got your info, but what i read this morning suggests that the BoC will hold the line on rates until perhaps the fall, with another possible increase in 2008.
RBC expects the Bank of Canada will hold the policy rate steady in 2007. Longer-term rates will rise in the second half of the year in line with U.S. Treasury yields, with rate hikes likely in 2008.
In the U.S., rising core inflation will keep the U.S. Federal Reserve from significantly easing interest rates this year. Stronger growth in 2008 will see the Fed shift into rate hike mode with a 50 basis-point increase expected in the second half of the year. A complete copy of the forecast is available as of 8 a.m. E.D.T., at www.rbc.com/economics/market/pdf/fcst.pdf.
However, if there is an election planned i wouldn't expect rates to increase.
i cannot see the BoC trying to control inflation using monetary policy like this.