Interest rates and Bank of Canada

[trent]

Everybody expects the Bank of Canada to make another substantial interest rate cut tomorrow. However our Canadian banks might not pass the cuts along to their customers.

How big do you think the cut will be? Do you think that the banks will pass the lower rates to Canadian borrowers?

[Canadian]

The Bank of Canada cut the overnight rate by 0.5% to one per cent, which is the lowest level ever! So now the rate stands at 1% and the Canadian central bank doesn't have much room for cuts anymore. I wonder what would they do when it's clear that the low interest rates cannot entice more borrowing from the over-indebted Canadians?

[Steven]

Well, the Bank of Canada still can take the rates down to 0% as the Federal Reserve did, but after that they won't have much else to do.

[Canadian]

Originally Posted by Steven

Well, the Bank of Canada still can take the rates down to 0% as the Federal Reserve did, but after that they won't have much else to do.

As I already said in another post, even if they lower the rates to 0%, there won't be many borrowers out there.

[trent]

Interest rates are bound to go up significantly once the majority realizes that all the money printing will ultimately result in much higher inflation. Forget deflation (except for asset classes like real estate), it will be inflation all the way.

[Canadian]

Now is a good time for homeowners with mortgages to refinance and lock in these low interest rates for as long as possible. If I had a mortgage, I would do that right away.

[bullish]

Originally Posted by Canadian

Now is a good time for homeowners with mortgages to refinance and lock in these low interest rates for as long as possible. If I had a mortgage, I would do that right away.

No rush to do this, as interest rates will stay low for many years.

[Steven]

Originally Posted by bullish

No rush to do this, as interest rates will stay low for many years.

I hope they stay low, or we all will be in big trouble.