Bank of Canada hikes key interest rate to 1.5%
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- Опубліковано 17 вер 2024
- The Bank of Canada has raised its benchmark interest rate 50 basis points to 1.5 per cent and signalled that more hikes are on the way. The decision by the central bank was widely expected as it moves to aggressively rein in high inflation.
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If u want to stop inflation? Stop government spending that’s the problem
The problem is the government. If there was no government there would be no problem like in the days of the old west.
I wish the Bank of Canada would hurry up and hike the interest rate to the same 1980's levels when Canadians could live off the interests earned from their savings in the banks. Back then, interest rates ranged between 18% and 20%. Those were the glory days!
It would be wrong to assume that the banks will raise their interests on their liabilities( ie our savings and other accounts,) because of the boc interest raises. The boc rate could go as far as 6-7% , savings account interest rates would still be peanuts
I recently got a return rate of 18 percent on a GIC that has a guaranteed return rate of only .49 percent. The catch was it had to be locked in for 3 years and if you cashed it in before it matured, you would be penalized severely. Rates in savings accounts suck nowadays.
@@MrBlakman1988 I noticed the GIC rates haven't gone up yet since the raise yesterday, but did three time since January for some reason.
@@rps1689 They did at Motive Financial.
@@rps1689 Don't know the country? Brazilian rates aren't that high. I hate playing Russian roulette with interest rates in other countries whilst trying to hedge the currency. Haven't checked the rates in India or Pakistan. I don't believe they're that high.
Can you guys focus on the gas pump is over $2. a litre now.. 18 eggs is over $6.50, The interest rate should be a lot higher
Beautiful country we living in.
Well, we had a good run. We're doomed.
We've been doomed since the 1981 recession.
@@parkerbohnn how so? wasn't there was a pretty epic economic recovery afterwards?
Crank it up to 7%
We need to budget but the Goverment is spending even more.
Somewhat irrelevant to the video, and bizarrely showing total ignorance of what budgets are.
Inflation is because of the government spending the past two years. Can’t print trillions of dollars world wide without devaluing it.
Um, no.
Just another 15 percent or so to reach the early 1980's peak!
I remember Canada savings bonds paying 19 and a half percent but they only let you buy $15,000 worth.
Will never get that high
@@Chris-se3nc Look back at real return in early eighties. Add that to the current inflation rate and you get a estimate, based on historical precident, for how high it can go. Current inflation is about 7%. If 3 or 4% real return is necessary to tamp down demand then we end up at 10 ish percent. Inflation can easily spike above 7%. Inflation peaked at 12% in early eighties. When central banks took a no holds barred approach to fixing it rates shot to the mid to upper teens. Real return cannot remain negative indefinitely. At some point something has to give.
Why not ? Canadians are supposed to get squeezed out of everything,
and are so used to it, it doesn't matter anymore ! They enjoy what's left, until they become homeless ! It's that simple !
For those carrying debt... I'd need to have money to spend on very expensive items (house car vacation etc) in order to have 'debtload'. I live on the dirt floor level here. Pension comes in, I pay rent, phone internet and food. If I'm lucky I get to eat out maybe 3 times (kept to cheap meals too), maybe a hobby item, some thrift shopping, and then it's back to being more or less broke for last 2 weeks. I can't afford anything big enough to be in debt from it. I own a home, I rent. I don't own a car I walk. I have zero debt though at least.
When my sister retired she went on an endless shopping spree spending as much as $50,000 a day on clothes and shoes. For the husband its gold jewelry and sport cars as well as vintage electronics, speakers, worthless collectables and vintage pinball machines. I got him to buy the vintage pinball machines and one of his friends Mark whose extremely wealthy has about 500 pinball machines in his basement. I taught him how to play better pinball and he gave my brother-in-law some free pinball machines then he started buying some of his own.
As homeowner I just paid $900.00 in bills. Internet, three cable boxs and two cell phones, then insurance , then unitlites. Thats my whole pay check. My husban check paid for our insurance deductible for the storm. I guess we dont need to eat for the next two weeks. That was $1500.00 so thankfull we dont have debt and have prepped for alot of years.
Actually relieved it's not a higher increase than 1.5%.
If you have the means, now is the time to take out that mortgage/loan you've been putting off because it looks like another interest hike is coming soon.
lol
What we need is more instant experts, hopefully interest rates will continue up to a traditional level around 7/8 %.
The level was about 10 percent. Everything used to be based on interest rates at 10 percent. Every old book on economics used 10 percent to base everything in the future on.
7% Inflation means that any debt you hold costs more, however, if your debt is locked, like in a mortgage, while your loan rate stays the same, the loan is worth 7% less.
So you if you have a 2% mortgage locked in for 5 years in a 7% inflationary environment, your beating that loan by 5% plus, the home value increases roughly by 7%, but not always amd it depends on the economy rather than raw inflationary numbers.
The banks will never tell you this but inflation is really great for fixed percentage debt holders!
It's a great time to make extra payments on your mortgage or get a 3 year GIC at 4% and when that GIC matures, put it all in your mortgage.
TD is offering a minimum return of 6.3 on one of their GICs.
@@rps1689 thats fantastic rates
@@NameName-lv4lu I'm holding off to see if they go up in the next week.
@@rps1689 that's not an annual rate thought, the fine print will likely say over the term of the gic
@@MrBlakman1988 Correct; but I have never had one go that low, they usually end up hitting or getting close to potential max rate.
People new to the housing market getting screwed over.
Not really, as prices are falling making it so they take on a smaller mortgage just at higher payments. It’s still historically very low interest rates.
Aw the condo I just purchased will fall in value
short term yes... long term... probably not.
But probably not in the long term.
@@rps1689 If the Bank of Canada really clamps down on the Chinese and closes the loophole where the foreign Chinese pay the poor local Chinese cash to put monster homes in their name and then sells them and pays no tax on the gain.
We're screwed
with intrest rates going up it just shows people in canada cant really afford there homes. if intrest goes up most people are house poor
collect that money and send it to Freeland's Ukraine
Banks will own all the houses now
Recent buyers own so little equity the banks always will
When you think about it, a bank owns the home until the mortgage is paid lol
@@joseopao The taxpayers will end up holding the bag except at the third tier banks where they couldn't sell the mortgages because no one would buy them.
Massive foreclosure will come soon
6:03 Give us some examples, Jessica, what you have been doing differently. Such a wishy washy answer.
6:54 Wow. Just wow. What an insight on suggesting to pay off the debt sooner rather than later. Obviously very original and creative.
300 years oil/gas reserves in Ontario alone.
ahhhhhhhhhhhhhhhhhhhhhhhh GREED ,,,SUCH A FORGOTTEN AND IGNORED BY ALL BANKS wonderful word !
why do we have an analyst that needs to check her notes on how to multiply 250 by 6?
Brampton is now for sale
Nah keep it. Nobody wants it lol
Good thing they already printed all that money and whole subdivision are rental properties
Hit back at the banks: Dump your loan insurance, dump your mortgage insurance. They don't cover anything anyway.
Hold your horses, mass layoffs are coming soon.
Companies are struggling to find people to hire at the moment. Most likely you’ll see a hiring freeze than any layoffs.
as a personal podcast financer, you would have thought, if she's giving advice to people about finances, why didn't she lock in her mortgage when the rate was at an all time low. It was the lowest rates ever......EVER!!! But now she's feeling the pinch. Wait until November and you'll for sure feel the pinch with at least a 1% increase, then have fun trying to buy xmas presents. Anyone and everyone should have locked in their mortgage rates when they were at an all time low, but for some reason people thought the ride was going to last forever. I locked mine in for 10 years at 2.89% and now the variable rate is about to climb to 3.20%. It was a no brainer to lock it in......
Or pay it off and be done with the banks.
Why not give context with your graph and show the pre-pandemic rate which was higher than what it has been "hiked" to. This is still just an almost return to normal until they hike beyond another 25bps. It's not hikemania, you were spoiled with ultra low rates, and they're almost gone, keyword almost
People are working so hard to stopped borrowing 😮
Interest Rates will continue to go up until inflation starts to abate. When interest rates were low, WHAT did you do! Borrowed MORE! I preached to pay down your Personal Debt as fast as you can, Mortgage brokers preach how to borrow more because of cheap rates. It is called Insanity
To little to late
The same measures were just announced in Europe today!
Remember the one world economy, every country did the same thing as per WEF. Too bad one of them didn’t jump out of a plane at 30,000 feet. What a scary thought when government say we have to pay more then the private sector so we can hire the best of the best. Anyone think we have the best and the brightest in government?
So here's the real question. How does this effect investments? Does mean interest on Mutual Funds and other long-term investments are going up too?
Yes eventually your saving account will return more
Yep especially if you have lock in investments like GICs especially market utility GICs.
The value of debt investments (bonds) is inversely related to interest rates. Existing debt investments will continue to return whatever the rate was when they were purchased. Their market value goes down, at the same time. That loss of market value is reflected in the net asset value of the fund (lower unit value). New debt investments will have a higher yield. Those new debt holdings are, however, at risk of market value loss if rates continue to climb.
@Brian Kruger I'm tempted to lock in some more capital into GICs, but want to see if the minimum guaranteed returns will be going up in the next week.
@@yingyang1875 With quantitative tightening that should push up short term rates.
If anyone is wondering what the 2022 1.25% difference changes-so a loan $350,000
Say your paying $1500 a month, changes to $1800 roughly 🤕
Fired him ! Swiss bank is field for bankruptcy 😮 please by fairly
Government could reduce taxes on fuel..It is where inflation starts.
Well, the oil and gas companies are experiencing record profits.
That's where the inflation is starting. They're taking advantage of war to boost their shareholder profits.
The solution is to nationalize them and sell the gas at cost.
3 months ago they said dont worry we will not raise them.
Good about time as well. If ya have a lot of debt its ya own fault so stop moaning.
Bank of Canada > no effect if your locked in fixed now, but a variable your losing principle $ due to >interest $. Once either mortgage renews, you will owe >$Monthly
some people liked this? bots for sure..
With this interest rate still so far below inflation, an economic collapse is unavoidable.
The notion that interest rates should be above inflation rates has no basis in fact, economic theory, history, math, or even basic reasoning. But, hey, at least you made it easy for people to dismiss your prediction.
@@Hyperpandas " no basis in fact, economic theory, history, math, or even basic reasoning" Ha! How quickly the American mortgage crisis has been forgotten.
@@seanhiggins2740 The American mortgage crisis was neither the result of rising central bank rates nor inflation, and it also has precisely nothing to do with your absurd expectation that the former should be higher than the latter. Care to substantiate that wild assed claim?
That's not how this works. If only it was so simple.
@@Hyperpandas You're right, the basis is entirely built on irrefutable math. Even stronger than mere precident. Debt investors have to get a positive real return or else there is no point owning debt. Currently real return is still negative.
This could cripple the economy as well as business wont borrow, and people also. which reduces demand and recession starts. I have no idea what kind of thinking is this. they need to increase the rates but not on monthly basis may be once in 2 months. The reason for inflation is not money given but the war and supply chain distruption rather than solving that u cant stop it.
That's the point. The only other way to reduce inflation is to increase productivity. Not Canada's strong point at this time.
Excessive money printing devalued the dollars so more devalued dollars are needed to buy the same thing ( plus interest rates were way too low for too long causing Excessive borrowing throwing caution in the wind )
As if Canadas rate matter outside of Canada….
They matter to currency speculators.
@@parkerbohnn yeah.... be proud of what little things people seem to care about Canada..... Hockey, Maple syrup, the leaf.... whatever.
We are doomed
It seems like the view is 'almost always' pessimistic when it comes to economy.