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Deal Expert
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Oct 26, 2003
27360 posts
1793 upvotes
Winnipeg
alanbrenton wrote:
Dec 1st, 2017 6:37 pm
The last one was in August/September so March it is?
i think the last one only raised by 50 basis point, you won't notice anything by march
Deal Expert
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Apr 21, 2004
41608 posts
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divx wrote:
Dec 1st, 2017 6:49 pm
i think the last one only raised by 50 basis point, you won't notice anything by march
2 x 25 bps around middle of this year.
Deal Fanatic
Jan 27, 2006
6668 posts
1798 upvotes
Vancouver, BC
But you have to remember that those two 25 bps increases were just removing the emergency 50 bps drop from earlier. Many of the financial institutions didn't drop the entire 50 bps either when it happened.

So, realistically, the two 25 bps are now in full effect (or 90% or so) and the economy is growing faster than expected, employment is basically back to pre-great recession levels (still a little low due to the net increase in population but pretty darn close), and the rest of the World is talking about increasing rates. Seems to me that things are pointing to increasing rates over the next year or two at the least.
Newbie
Feb 11, 2016
73 posts
78 upvotes
Huge move today for sure. Rarely see CAD move so much. Good job numbers, gdp growth, wage growth, oil trending up. Everything's lining up.

Let's hope the economy stays on track and the rates normalize. Increase of 2-3% would put us back in a normal range.

Its not going be pretty for real estate for sure. I personally bought this year so it'll personally hurt. Short term pain for long term growth...
Jr. Member
Jun 19, 2017
189 posts
349 upvotes
To people who have their finances in order anothet tiny interest rate hike won't change much.

I think there is a relavent number of people financially teedering on the edge, swimming naked, they have kept covered through the graces of strong capital appreciation, expansion of Helocs, and really low variable rate mortgages.

The stars have aligned for some for so long that some may not even notice their predicaments. If not already, they are going to start to feel squeezed, slowly and surely...and that's even still while the economy is good. These rate hikes will start to add up.

Even if this represents 1% of mortgages out there the effect will not go unnoticed by the market.

Also, leading up to the 1990s one of the major factors which popped the RE bubble were interest rates which rose from a low around 10% to a high around 14%. We don't need high mortgage rates today to have a similar effect...a 5yr fixed mortgage rate move from 2.5% to 5% would represent the equivalent reduction in borrowing power.
Deal Addict
Feb 9, 2009
4660 posts
2338 upvotes
Growth is still below 2%... those dreaming of 3% hikes are doing just that... dreaming.

In the summer when GDP growth was hovering around 4% seasonally I could see why Poloz pulled the trigger on a rate hike.

Nearly 50k of the 80k jobs created in November were part-time. I assume for the winter holidays. Dont expect 80k to be added in December. Amazon alone was hiring hundreds and hundreds of full and part time jobs for the holiday season in November.

Let's see in Jan/Feb/March where the jobs number is. Im not squeezing at the jobs number, it is still impressive, but I'm not getting carried away here.
Deal Fanatic
Jan 27, 2006
6668 posts
1798 upvotes
Vancouver, BC
Sanyo wrote:
Dec 1st, 2017 10:51 pm
Nearly 50k of the 80k jobs created in November were part-time.
Part time or not, the consensus forecast was only 10,000 jobs... so even if the forecast was for 10,000 full time jobs, at 30,000 full time jobs, the job number still blew the forecast out of the water. Also, don't you think that the people doing the forecast was smart enough to understand that there is a lot of seasonal hiring at this time of the year? After all, the last time I checked the calendar, November happens every year about the same time...

Generally, the economy grows to spurts so it won't be a straight line of increases rather a bumpy line. What's important is the trend, not the noise around the trend....
Deal Addict
Feb 9, 2009
4660 posts
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craftsman wrote:
Dec 2nd, 2017 12:35 am
Part time or not, the consensus forecast was only 10,000 jobs... so even if the forecast was for 10,000 full time jobs, at 30,000 full time jobs, the job number still blew the forecast out of the water. Also, don't you think that the people doing the forecast was smart enough to understand that there is a lot of seasonal hiring at this time of the year? After all, the last time I checked the calendar, November happens every year about the same time...

Generally, the economy grows to spurts so it won't be a straight line of increases rather a bumpy line. What's important is the trend, not the noise around the trend....
I guess not since they were really wrong LOL... hey there was one where they expected a huge number and came much less...all joking aside the jobs report is a very hard thing to predict sometimes.... it's pretty much a computer modelling the outcome for these guys.

But the trend is up so thats a positive and I wont take anything from that. People working is a good thing, better then them sucking up social services.
Deal Addict
May 31, 2007
4446 posts
1546 upvotes
Jobs are always volatile on a month to month basis. Seasonal or not, always best to look longer term. Canada has added 390,000 jobs for 12 months straight and only now has the lowest unemployment number since 2008. This means a lot more than just focusing on a seasonal excuse.


Also I would say this report in particular was a surprise because everyone was expecting less after the weak GDP this summer, economist and even BOC was concerned that growth had stalled.

Nope, just exports were dragging it down.

But now that USA passed tax cuts, it's expected it could add 1% growth to their GDP. They buy most our exports and the loonie has fallen enough, they can get more value and will need to purchase more goods/oil since their economy will keep expanding and growing.

Now that OIL is climbing this will have a big boost as well. Oil forecasted over $60 next year as global economy grows and recovers together.

For those that think everyone's got all this extra money when rake hikes increase your payments, maybe you're right. But there will be MULTIPLE rate hikes. How many times can people pull a rabbit out of the hat when so many surveys imply everyone's almost broke?

Also equity will be shrinking as housing prices go down, payments go up.

Refinance no more because of OFSI.

No more running, no more hiding. Time to pay the piper.
Deal Addict
Sep 12, 2006
1174 posts
192 upvotes
Jungle wrote:
Dec 2nd, 2017 1:59 pm

For those that think everyone's got all this extra money when rake hikes increase your payments, maybe you're right. But there will be MULTIPLE rate hikes. How many times can people pull a rabbit out of the hat when so many surveys imply everyone's almost broke?
This. As a developed nation, we're among the most indebted people on the planet.
[OP]
Deal Addict
Feb 22, 2011
1888 posts
1702 upvotes
Toronto
Jungle wrote:
Dec 2nd, 2017 1:59 pm
For those that think everyone's got all this extra money when rake hikes increase your payments, maybe you're right. But there will be MULTIPLE rate hikes. How many times can people pull a rabbit out of the hat when so many surveys imply everyone's almost broke?
In my opinion you should avoid using absolutes. You can't know there will be multiple hikes in the near future. For all you know the numbers tank and there are rate cuts again. If all the doom sayers on here are right and the RE industry tanks taking the economy with it you think they will increase rates again? Even if you don't think it will happen how are you so certain there "will be MULTIPLE" rate hikes. How could you even know that when BOC doesn't?
Deal Addict
May 31, 2007
4446 posts
1546 upvotes
alex_d10 wrote:
Dec 2nd, 2017 2:05 pm
This. As a developed nation, we're among the most indebted people on the planet.
Yes did you see this? OOOH.. Canada :(
Screen Shot 2017-12-02 at 2.44.22 PM.png
Deal Addict
May 31, 2007
4446 posts
1546 upvotes
rjg4235 wrote:
Dec 2nd, 2017 2:21 pm
In my opinion you should avoid using absolutes. You can't know there will be multiple hikes in the near future. For all you know the numbers tank and there are rate cuts again. If all the doom sayers on here are right and the RE industry tanks taking the economy with it you think they will increase rates again? Even if you don't think it will happen how are you so certain there "will be MULTIPLE" rate hikes. How could you even know that when BOC doesn't?
If growth stalls then Poloz won't hike.. problem is he doesn't control the bond market> pretty much the usa does and their economy is growing very well right now.

As of right now next year looks very possible for at least 3-4 rate hikes. Most economist are forecasting the same. Overnight credit swaps still predict first hike starting in March. I think POLOZ might start in Jan as data coming in better than expected. Remember we are not in recession anymore.

The economy finally has some momentum now, wage growth is coming in and inflation is coming. This should continue as more jobs are created, more people are employed, gov, private and business investments is at recent highs also pays off. The icing on the cake will be rising oil prices.

This is all trending and lots of positives for economy right now pressing into 2018. It would be foolish to say no rate hikes are possible based on the economic activity lately. No shocks seen in the near future yet.
Sr. Member
Oct 21, 2014
677 posts
460 upvotes
Burlington, ON
Jungle, if everyone is almost broke as you say, and the Bank of Canada believes the same as you, what would motivate them to raise rates and cause a calamity? Shouldn't they go slow? I think the truth of the matter is not nearly as dire as you believe it to be.

Also, remember that the boc sets policy to control inflation, destroying the wealth of their countrymen in not in the mandate.

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