7 November 2012
But what Obama’s 2nd term means for Canadian mortgage borrower?
Some experts expect the monetary policy to remain loose under Obama.
The average market forecasts suggest that the yields, which affect mortgage fixed rates,will stay unchanged or go down till the end of 2012.
In the same time, in case the fiscal cliff is not avoided, investors will park money into relatively safe U.S. Treasuries and keep the yields low. By the beginning of 2013 investors have to decide if the U.S. cope with the fiscal issue or face the debt downgrade, lose investors or see high inflation as a result of extensive spending. All these factors may raise the U.S. yields and interest rates.
Meanwhile, until the U.S. show great economic growth, the Canadian key lending rate will likely stay unchanged, which is, of course, good news for our mortgage borrowers.