In recent weeks, the financial markets have experienced significant movements, particularly concerning Canadian bonds and, consequently, mortgage interest rates. If you’re considering buying a home or refinancing your mortgage, understanding how recent events might affect your decisions is crucial. Here’s a clear and accessible analysis.
Why Have Canadian Bonds Been So Volatile?
U.S. Presidential Debate and Its Global Influence
On September 10, 2024, the U.S. presidential debate created uncertainty in global financial markets, which also impacted Canadian bonds. This uncertainty has contributed to the volatility observed in Canadian bonds.
U.S. Inflation and Unemployment Rate
The recent decrease in U.S. inflation has been a key factor in the fluctuation of bonds. Inflation fell to 2.5% in August 2024, marking its lowest level since February 2021. Additionally, the U.S. unemployment rate edged down from 4.3% to 4.2%. These changes have influenced global economic expectations, impacting Canadian bonds.
Unemployment Rate in Canada
The unemployment rate rose to 6.6% in August 2024, a slight increase from 6.4% the previous month. This increase might lead the Bank of Canada to consider maintaining its monetary policy to support employment.
What Does This Mean for Mortgage Interest Rates?
In recent weeks, due to the factors mentioned above, along with other economic conditions, there has been a reduction in bond yields. Consequently, banks have lowered their interest rates for mortgage loans. Staying informed about these trends is crucial if you’re interested in fixed rates, as they provide predictable payments and protection against future rate increases.
Recent events have created an intriguing landscape for bonds and mortgage interest rates. This environment presents opportunities, depending on your financial situation and goals.
If you need personalized advice or want to understand how these changes might affect your mortgage, contact us today. We’re here to help you make informed financial decisions and find the best option for you.
Have Questions? We’re Here to Help!
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Karla Badillo – Sherwood Mortgage Group Brokerage 12176