Got the rate jitters?

The economy is (annoyingly) resilient against the current higher rates, so far.

What the what. After a meteoric rate rise — the fastest climb in one year since the 90s, it seems Canadians still have some gas in the tank for spending. And companies still have the demand for goods and services to keep the unemployment rate low.

It's understandable — we gathered a lot of bucket-list to-dos during the pandemic and saved our coins to have a field day when we were released back into the streets, shops and airports to frolic and fraternize (aka spend). And supply chains are still healing and dealing with world events to keep some prices elevated.

A few reasons the central bank is facing pressure to raise rates again (to have us quaking in our rate-expectation boots):

Inflation and GDP are up.

Spending and demand (for the most part) continued to push price gains to a surprising inflation rise in April (to 4.4% from 4.3% in March). The first quarter Canadian GDP (Gross Domestic Product) report also saw 16 of 20 sectors gaining on the rebound from the impact of the Omicron COVID variant — for an increase of 3.1% over the previous quarter.

If higher inflation continues to stick around, the BoC will consider posting yet another rate deterrent.

Canadian debt loads are rising.

Canadians have the dubious distinction of having the highest national average household (non-mortgage) debt in all the G7 countries. The central bank may want to pour more cold water on spending and borrowing.

Our job numbers are still strong.

Our national unemployment rate in April remained relatively unchanged at a low 5.0%. The bank wants to see obvious signs that the labour market is softening; look for the next jobs report from Stats Can on June 9.

U.S. job numbers are still strong.

Canada is closely tied to the U.S. economy. Their inflation has been slowly declining, but their job market is still humming, adding over 339K jobs last month (a normal increase is 150K). To mix the message, however, their unemployment rate also rose from 3.4% to 3.7% as a result of layoffs (a sign of some cooling counterwork).

Will fixed rates move with today's variable-rate pause?

Fixed mortgage rates, tied to fluctuations in the bond yield market, are already increasing as a result of warmer economic data and with expectations of a rate drop now pushing further into 2024. We should see some lenders continue to post fixed-rate increases this week as they catch up to yields.

With today's announcement, the Bank of Canada will say some weighty words about what it sees coming, which may move fixed rates up again in the next while.

The markets will also bite their nails waiting for the CPI (Canadian Price Index) numbers to come out June 27, to shed more light on how the bank might proceed.

Dan Eisner, TNM CEO, has thoughts on the next central bank move.

Remember — the central bank wants to wait on the sidelines. May's inflation reading is expected to be lower. There are also several more signs that the economy is slowing.

True North Mortgage's Founder and CEO, Dan Eisner, offers his take on whether we'll see a rate hike at the July 12 rate announcement. Bookmark his blog below! You'll get updates on his predictions, the numbers coming out and what they might mean for rates going up or down in 2023 (are we headed for a recession?).

Read more in Dan's 2023 Mortgage Rate Forecast

Thinking of making the switch to a fixed rate? We make it easy.

The markets have been volatile, with U.S banking scares plunging the rate expectations one minute, and the hotter-than-hoped numbers coming out the next. If you're tired of waiting for your mortgage rate to drop, use our Mortgage Payments calculator below to get an idea of what a rate change might mean for your payment numbers. Then give us a shout for fast, free advice (in your preferred language) based on your situation.

Need to get your mortgage payments on solid ground?

While we cling to the hope of no more hikes, are you worried about your upcoming renewal? Don't go it alone — we're here to help with your best rate and better mortgage.

Get essential tips on how you can save money, or consolidate your debt into one lower interest rate:

• Should you stretch your mortgage at renewal?
• Short-term mortgage rates offer a middle ground for risk
• Need to spring some funds?
  
• Switch to 6-months of Rate Relief®
• Other ways to save on your mortgage

Give us a shout or apply online, anytime, from anywhere in Canada. With over 13,000 5-star client reviews, you'll get unbeatable service from brokers who care.