The U.S. Federal Reserve is keeping the interest rate on its key interest rate unchanged for the first time in three years and is also keeping the central bank’s benchmark rate unchanged.
That means Canadian investors will be getting a better sense of what Canada’s economy is doing.
And that means a lot to Canadians.
The U.K. also cut its benchmark interest rate to 0.5 per cent for the third time in four months, the lowest since 2009.
The Fed’s decision to cut interest rates is seen as a signal that the economy is stabilizing.
The Canadian economy, on the other hand, is slowing sharply.
Canada has seen a lot of bad news this week.
The Bank of Canada said Thursday it expects the economy to grow by 1.1 per cent this year, a slow pace that has caused concern among the central banks.
And the Bank of England said it expects Britain to shrink this year by 0.3 per cent, a figure the central bankers said they would keep at all times until the end of the year.
This is what the Bank Of England has been telling us.
We’ve seen very mixed economic data this week, and the Fed’s announcement has been very encouraging to our thinking.
– Bank of Japan governor Haruhiko Kuroda on Thursday, March 2, 2017, in Tokyo.
That said, the Bank’s outlook is now much stronger.
In a report this week the central banker said the Bank had seen a “strong signal” that growth in China was “moderate,” but he added that it would be premature to draw conclusions on its economic outlook.
For Canadians, there is also a lot on the line.
Inflation is expected to rise sharply, and in many cases, the rate on home mortgages will increase even more.
On Wednesday, the central Bank cut interest rate by half a percentage point, to 0-0.25 per cent.
But that is not enough to offset the impact on home prices.
On Thursday, the bank also raised its key rate by a full percentage point.
In other words, that will push prices up even more if the economy does not improve.
“If you were to take out a loan from a lender with a 2 per cent interest rate, the amount you’re taking out will go up by almost 40 per cent,” said Doug Porter, senior economist at Bank of Montreal.
“If you take out an interest rate of 0.75 per cent and it stays at that, it’s going to be a very difficult adjustment.”
The impact on Canada’s housing market is going to go way beyond the U.W. This is going back to the core of the question that Canadians have been asking: Is Canada really going to keep its current house price growth rates or will the economy slow down?
There are signs the answer is no.
There has been a slight upturn in sales, with prices rising for some items such as a $1,500 home in Montreal and for others such as an $800,000 house in Vancouver.
But overall prices have been flat or declining since the beginning of the summer.
But there are signs of recovery.
Home sales are up 1.5-per-cent in Vancouver and 1.6-per cent in Toronto, according to the real estate website Zillow.
And while home prices are up for many, the median price is down about 2 per-cent from its peak in the first half of the decade.
That’s a sign that many people are getting used to the changes that are coming.
While the price increases are a positive sign, they are also a sign of things to come.
The bank of Montreal’s Porter said it is clear that people will be adjusting to the new prices.
“There will be a lot more uncertainty about the future.
There’s a lot less trust that the bank will keep rates steady,” he said.
In the meantime, Canadian companies are keeping their head above water, especially in the financial services sector.
Canada’s financial services industry has been on a steady downward trend, and now it is seeing some positive signs.
There is a very good story here.
It has been pretty tough.
But this is a really good time to be in the market.
We’re seeing a recovery in the markets.
– David J. Henderson, chief executive officer of Toronto-Dominion Bank, on Thursday March 2.
I don’t think this is going away, but it’s not going to last forever.
The big picture is, the economy has to get back to where it was before this crisis hit.
And I think we are moving in that direction.
The markets are showing signs of a pickup.
Canadian banks are feeling the pressure.
Many have been reporting negative quarterly results.
Bank of Nova Scotia CEO Doug Porter said the bank has been experiencing a very challenging period.
“Our capital structure is in a very vulnerable position,” Porter said