Bank of Canada: Interest Rates at Rock Bottom Until 2022

Dated: September 10 2020

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The front of the Bank of Canada

This morning the Bank of Canada announced it would maintain its .25% overnight rate, which it considers the effective lower boundary. The Bank also said it would continue its Quantitative Easing program, buying at least $5 billion per week of Government of Canada bonds. The goal of QE is to keep interest rates low by increasing the supply of money in the economy.

The Bank projects the Canadian economy will bounce back more quickly in the third quarter than previously expected, though it cautions that the long term recovery will be “slow and choppy.” According to the Bank the recuperation will require extraordinary policy support, and they expect to hold interest rates down and continue QE until the recovery is well underway.

Mortgage rates should remain very low until 2022, a double-edged sword for homebuyers. Low rates encourage buyers to enter the market, which generally leads to higher prices, especially for the single family homes which are in even higher demand since the debut of COVID-19.

You can read the Bank's entire statement here (but Oh, my God, it's so boring.)

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Chris Logan

A Victoria resident for over 20 years, I grew up in Halifax and studied at Dalhousie University, Concordia, and the National Theatre School. Several years in the music industry then led to an extended....

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