16 July 2014

It’s important to mention that using the word “neutral” is new for the Bank. Meanwhile, the accompanying document made it clear that the BoC believes interest rates will be much lower than we’re used to.

“We still have a long road to pass before we get home,” – the Bank of Canada chief Stephen Poloz said. “And, when we do it, it’s quite possible that interest rates will be lower than we were accustomed to in the past.”

In addition to it, the bank cut its GDP growth projections by 0.1%. Now it expects 2.2% in 2014 and 2.4% in 2015.

“As a result, the economy is expected to return to full capacity in mid-2016, which is later than anticipated in April,” – the bank noted.

Above news are music to the ears of variable mortgage holders, who might continue to enjoy extremely low interest rates on their mortgages for another 2 years!