Some economists have said that a trade deal that still has some tariffs in place opens the door for the BoC to cut rates in 2025 to prop up the economy.Cole Burston/The Globe and Mail
This week’s inflation report crushed most hopes that variable mortgage rates will drop when the Bank of Canada makes its interest rate decision this month.
The consumer price index for June came in at 1.9 per cent year-over-year – up from May’s 1.7-per-cent mark – and core inflation also ticked up slightly to 3.1 per cent from 3 per cent.
Market expectations of a rate cut plummeted. Markets are now only predicting an 11-per-cent chance of a rate cut when the Bank of Canada makes its decision on July 30.
This week’s inflation data was the last major economic report ahead of that rate decision. It follows a surprisingly strong jobs report earlier this month that further lowered expectations of a cut.
Meanwhile, the Canada five-year bond yield reached its highest level since January at the 3.1-per-cent mark. Victor Tran, a mortgage specialist with rates.ca, said some lenders are already advising him of slight rate increases on the way.
There is one bit of news that could bode well for the chance of future variable-rate cuts however: Prime Minister Mark Carney has changed his tone on a potential trade deal with the United States, saying that it’s unlikely a deal will eliminate all tariffs.
Some economists have said that a trade deal that still has some tariffs in place opens the door for the BoC to cut rates in 2025 to prop up the economy. Whether that’ll happen depends on the finer details of what tariffs remain and if inflation can cool down.
Mortgage rates are sourced by Ratehub.ca. For a comprehensive list of today’s mortgage rates for each term/type, visit ratehub.ca/best-mortgage-rates.
Ratehub.ca is a mortgage-rate comparison marketplace and mortgage brokerage. It helps millions of Canadians compare and obtain the best mortgage rates, credit cards, insurance, deposits and loan products.
Rates shown are the lowest available for each term/type and category (insured versus uninsured) as of market close on July 17.
