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What affect will an upcoming federal election have on rates?
As far as fixed interest rates are concerned, the affect should be minimal unless the conservative party is defeated; however the election will likely cause the Bank of Canada to hold off from raising rates until the 3rd quarter of 2011. The reason for this is mainly based on past circumstances whereby the Bank of Canada has held off from raising rates during election periods until a clear picture of future government economic policies are determined.
Government of Canada bond yields have been bouncing back from a rapid drop caused mainly by the crisis in Japan. This drop in bond yields lead to a slight decrease in fixed mortgage rates which we expect to be short lived unless another crisis of some type occurs... at the moment we will be watching events in Europe and the Middle East take their course.
There is a possibility that the terrible destruction to Japan's coastal areas may cause a slight increase in global inflation due to demand for building materials and the employment of workers required to repair the damage. With repairs estimated in the $300+ billion range, there could be a jolt to any economy with companies associated with the reparation leading to accelerated economic growth. We have already seen increases in the stock prices of Canadian lumber companies and many mining companies are expecting increased demand for their products. With inflation comes higher interest rates.
As far as fixed interest rates are concerned, the affect should be minimal unless the conservative party is defeated; however the election will likely cause the Bank of Canada to hold off from raising rates until the 3rd quarter of 2011. The reason for this is mainly based on past circumstances whereby the Bank of Canada has held off from raising rates during election periods until a clear picture of future government economic policies are determined.
Government of Canada bond yields have been bouncing back from a rapid drop caused mainly by the crisis in Japan. This drop in bond yields lead to a slight decrease in fixed mortgage rates which we expect to be short lived unless another crisis of some type occurs... at the moment we will be watching events in Europe and the Middle East take their course.
There is a possibility that the terrible destruction to Japan's coastal areas may cause a slight increase in global inflation due to demand for building materials and the employment of workers required to repair the damage. With repairs estimated in the $300+ billion range, there could be a jolt to any economy with companies associated with the reparation leading to accelerated economic growth. We have already seen increases in the stock prices of Canadian lumber companies and many mining companies are expecting increased demand for their products. With inflation comes higher interest rates.
