Interest Rates More Likely to Go Down than Up

The indicators are starting to point in the same direction: that interest rates are more likely to fall than to rise.

That is something of a contradiction of what we’ve been hearing forever, warnings that rates can only go up and those carrying big debt had better get ready to pay more in carrying costs. But then we had this week’s decision by the Bank of Canada to hold the line on its base line interest rate. It was once again confirmed at 1.75%.

But it is the narrative that goes with the decision that has economists buzzing. The central bank remains what they call ‘accommodating’ which is technospeak for leaning towards lower rates which makes borrowing cheaper. They cite challenges facing the economy – trade disputes are now becoming more and more of a worry – and raising interest rates would compound the slowdown. They say trade challenges are not only hitting us but are now beginning to impact overall global growth and with the world slowing down, this is not the time for Canada to begin making it more costly to do business or buy a house.