GIC rate lowered by Meridian, Haventree, Canadian Tire. Are we there ? | GIC discussions | Discussion forum

AlainJF said
I was really surprised to see some GIC rates going down in the past few days, especially Meridian, who lowered all of their GICs.

Have we hit the top of the hill?

Is this related to some new events or news (ex: NVDIA)?  

If you read the KPMG outlook which was in the media yesterday - it said things like
- Canada is facing a gradual and bumpy recovery over the next couple of years
- Business is not as good in Canada as in the USA
- Growth is expected to be tepid and subpar
- etc.

I do not see any case for GIC interest rates to rise in Canada - I would not be surprised if Canada even goes into a mild recession. Also, I do not think the recent Federal Budget does anything much that will improve the Canadian economy. Yes there is lots more spending, but growing deficits, growing debt and growing interest on the debt.
House sales and prices are down so what is the incentive for FIs to pay higher GIC rates when they may not need the funds for less growth in mortgages.

The issuers will lower their GIC rates if GIC's are being issued faster than the GIC money is lent out.