13 September 2010

The only thing we can do is rely on economists’ forecasts, so here are some of their quotations concerning interest rates increases:
•    The economic situation will get worse, that’s why the Bank of Canada “will have to stop raising rates for some time”, –  Douglas Porter, BMO Capital Markets deputy chief economist.
•    “…It seems to us that the bank may pause longer than just for the next few meetings”, – Michael Woolfolk, BNY Mellon strategist.
•    “We think the Bank of Canada will pause for some time…We do not expect any rate increases until March 2011”, – Craig Alexander, TD Chief economist.
•    “…It looks like the Bank doesn’t know what it is going to do”, – Avery Shenfeld, CIBC World Markets Chief Economist.
•    “…Today the rates are very low, so, probably, we’ll have some increases in the next 18 months, but only in a gradual pace”, – Craig Alexander, TD Chief economist.
If it seems to you that no one knows what’s going to happen, then you’re right.
But the most interesting thing is that it’s not so important today. The rates are historically low now. Today’s 3.59%-3.79% five-year fixed rate is a gift. As well, as 2.90% three-year fixed rate and 2.30% variable rate. In other words, today rates are so good that you don’t have to worry about choosing the right rate – they all are great. The main thing is not to borrow too much.

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