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BoC cuts rates by another .50%
March 13, 2020
11:29 am
ReX
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2:15 pm EST Friday the 13th
BoC has cut interest rates by another .50 down from 1.25% to .75%

March 13, 2020
12:12 pm
FC
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This is ridiculous...

March 13, 2020
12:13 pm
Alexandre
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They really made it Friday the 13th for us.

March 13, 2020
12:21 pm
Dean
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.
They're pulling the trigger too quick ... this is the second cut, in 9 days

If they keep this pace up, they'll soon run out of rate cutting room.

It seems that even the BoC is in COVID-19 'Panic Mode' ... Sad sf-confused

sf-cool " Live Long And Prosper " sf-cool

March 13, 2020
12:40 pm
toto
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Didn't see that one coming . Wow

March 13, 2020
12:50 pm
Adam1
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Yikes. Are savings account and GIC rates expected to go down even more?

I'm just about to fund a 5 year GIC at 3%. Application already submitted so I'm guaranteed the rate even if it goes down today. Nothing higher than that.

Adam

March 13, 2020
1:05 pm
Dean
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Adam1 said

Yikes. Are "savings account and GIC rates expected to go down even more" ?

. . .  

That ⬆ should be a 'statement', not a question❗

You can bet your last nickel, they'll be going down more. sf-confused

sf-cool " Live Long And Prosper " sf-cool

March 13, 2020
1:06 pm
Doug
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Dean said
.
They're pulling the trigger too quick ... this is the second cut, in 9 days

If they keep this pace up, they'll soon run out of rate cutting room.

It seems that even the BoC is in COVID-19 'Panic Mode' ... Sad sf-confused  

I called this; I thought they'd wait until April 15th to do another 50 bps cut, but for what it's worth, economists are now forecasting a further 50 bps cut before the end of June, taking us to 0.25%. At that point, I think they'll hold the line, though there's a chance we could go to 0%.

More likely, though, will be the Bank of Canada becoming lender to the Government of Canada at 0-0.25% to finance infrastructure spending and/or quantitative easing.

Cheers,
Doug

March 13, 2020
1:46 pm
Alexandre
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"No one should have to worry about paying rent, buying groceries ... because of COVID-19. We will help Canadians financially."*

* Except seniors on fixed income.

March 13, 2020
1:47 pm
Benjames35
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Well...at least my mortgage is down to 2%

March 13, 2020
1:50 pm
Doug
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Benjames35 said
Well...at least my mortgage is down to 2%  

Absolutely. Anyone that re-upped into a 5-year closed variable rate mortgage is sitting pretty right now. There's almost no chance rates will be significantly higher (i.e., 1% or greater) in at least 5 years. sf-cool

Just keep paying it down, take advantage of those rate drops to sock an extra payment onto your mortgage each year and maybe make an annual bulk payment if not already doing so.

Cheers,
Doug

March 13, 2020
1:55 pm
Doug
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Alexandre said
"No one should have to worry about paying rent, buying groceries ... because of COVID-19. We will help Canadians financially."*

* Except seniors on fixed income.  

Can't speak for the price of groceries, but I expect rents to decrease or stay stagnant, possibly through additional provinces bringing in temporary rent controls. In terms of utilities, I expect the provincial utilities commissions to order rate reductions to the monopoly utility companies and even the Crown corporation monopoly auto insurers. So, you will see costs go down. However, I hate that term "seniors on fixed income." That applies to any senior.

If you are on full GIS and Spouses Allowance, then we'll talk. That's a senior on a fixed income. 😉

Cheers,
Doug

March 13, 2020
2:46 pm
ReX
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Doug said
If you are on full GIS and Spouses Allowance, then we'll talk. That's a senior on a fixed income. 😉

Cheers,
Doug  

Are we too rich of a liberal to discern what Aleaxandre is talking about?

March 13, 2020
2:50 pm
Doug
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ReX said

Are we too rich of a liberal to discern what Aleaxandre is talking about?  

No.

Cheers,
Doug

March 13, 2020
4:21 pm
Bill
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Alexandre, I'm not sure who you're quoting but it seems to me that seniors on fixed incomes are precisely the ones who will not be affected at all by an inability to work due to COVID-19, it's working people whose workplace is shut down or who otherwise can't work due to the virus that are the focus of the quote.

March 13, 2020
4:54 pm
Vatox
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Well, s*#t. This isn’t going to fix anything. It’s only going to delay the outcome and make that outcome more disastrous. The problem with the situation is workplaces shutting down, events canceled and travel/ tourism closed. It’s basically lost jobs and income. Lower interest rates isn’t going to cure any of that. The people in power are a joke.

March 13, 2020
5:10 pm
Rick
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I dunno bout Bill...but it's not the virus I'm worried about....it.s the RSP/TFSA/HISA (sic) and non-registered GIC's renewing at a rate so low it does affect my income. 20 years ago I was expecting to retire with savings earning a not-so-unreasonable 5 to 6 %. Unfortunately...we have dug ourselves a hole so deep, those kind of rates would be disastrous to all the young familys struggling to get by with mortgages at 3%.

March 13, 2020
5:38 pm
Keith1
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I agree with the comments here. Using a quote from Poloz

"By cutting its overnight rate target, the central bank hopes to boost the economy by prompting large banks and financial institutions to cut prime lending rates and free up money for households to spend.

“In situations like this, it’s consumer and business confidence which tend to erode and that causes decisions to slow down regardless of how much capacity there is in the system,” Poloz said."

Our households are overburdened in debt already. lowering interest rates won't cause people to spend money when they are not venturing out because of the virus.

March 13, 2020
5:43 pm
ReX
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Canada Inflation summary for January 2020
Release Date: February 19, 2020
Next Release Date: March 18, 2020

The Consumer Price Index for Canada is 136.8
Inflation Rate 2.4%
---------------------------------------
Carbon Tax on Natural Gas Heating 12.5%
HST on Carbon Tax (ON) 13%

March 13, 2020
6:33 pm
Bill
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Rick, I certainly sympathize with those who planned assuming reasonable interest rates, the extreme low ones we have today could not have been forseen.

I think it's just the usual response we're seeing here, i.e. lower interest rates when the economy tanks for whatever reason. And in a society where individuals right on up to all kinds of institutions are in debt it doesn't seem like a bad idea.

Vatox, that money people are not spending now can be used to pay off some debts, or else can be spent whenever things get going again, it won't disappear. And that's the idea behind temporary measures to help, it's just for a while (hopefully) that some workers who can't work right now may need help to pay the bills. Not saying I agree with the measures, just trying to express my understanding of their intent.

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