Mortgage Minute with Jacqueline Baker
Good morning,
Today the Bank of Canada (BoC) announced a 1/2 point drop in their overnight rate to 1.00%. The Bank Rate is now at 1.25%.
The reasons for this rather aggressive (but expected) move can be attributed to the continuing deterioration of the global economic outlook and the continued and increasing consumer pessimism which has eroded domestic demand. All the major economies are now in a recession.
Governments and central banks need to shore-up consumer and business confidence and stabilize the global financial system as a precondition for any economic recovery. The BoC reports that this concerted and orchestrated move by foreign governments amd central banks is indeed having the desired effect but warns that it will take some time for conditions to normalise.
The BoC expects the Canadian economy to contract by mid-2009 with real GDP dropping by 1.20%. However, they predict that as the monetary and fiscal stimulus packages work their way through the economy (locally and globally)real GDP is expected to rebound by 3.80% in 2010. So, although we are reported to be in a recession the good news is that the recovery will be underway in 2010.
On another positive note, the BoC sees core inflation bottoming out at 1.10% by year-end with total CPI inflation dipping below zero for the first half of 2009.
The next scheduled date for announcing the overnight rate target is March 3rd, 2009. If you would like to view the full BoC announcement please visit my website at http://mypowermortgage.com/
Save your clients money today! Compare rates here. Even if your clients have already been approved by their bank, there is a very good chance that I can beat their rate. I would love to compete for their business.
Kind regards
Jacqueline Baker
Mortgage Broker
www.mypowermortgage.com
The Mortgage Centre
c | 604.724.6982
f | 604.922.3899
1575 Marine Drive
West Vancouver BC V7V 1H9
