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Bank of Canada Cuts Rate by .5%
The Bank of Canada lowered its benchmark rate by half a point to revive an economy that's growing at its slowest pace in 16 years, and signaled more easing may be needed. Governor Mark Carney and his five deputies cut the rate on overnight loans between commercial banks to 3 percent, the lowest since December 2005, a move predicted by 28 of 32 economists in a Bloomberg News survey.
The projections for growth and inflation in the central bank's statement today indicate policy makers may ease again as soon as their next meeting on June 10, economists said. The bank cut its 2008 growth forecast to 1.4 percent, the lowest since 1992, from a January prediction of 1.8 percent, and said inflation will stay below their 2 percent target until 2010.
"The main concern for the Bank of Canada is that economic growth is going to be well below potential," said Craig Alexander, deputy chief economist at TD Bank Financial Group in Toronto. The bank today sent "quite a strong signal," he said, "and we expect another rate cut at the next meeting."
April 22, 2008 in Arranging Mortgage Financing | Permalink
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Comments
even if BOC cut rates again for 2%,real estate market in Toronto and Vancouver is too high.
I need 100 years mortgage to buy newer detach in those cities.Why is the prize so high? Because of new emigrants and they made fake market.Will see after first drop of prizes will be disaster because they still thinking the real estate will going up forever.
Posted by: Mike | Apr 24, 2008 12:52:16 PM
This step was widely expected so I am not sure about efficiency of transmission in to real economy. If something is expected it is also already involved in expectations. Concerning real estate market it should work because I think that the problem was mainly psychological and people after this signal will become more optimistic.
Posted by: Vancouver realtor | Apr 23, 2008 4:45:49 AM
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