Chatter about interest rates continues to run high in the background as market watchers wait to see what happens next. Rising yields on five-year Government of Canada bonds, employment numbers that are 'good enough', and the desire of trend-setting lenders to boost profits have increased predictions for a bump in fixed mortgage rates. The fact that GoC bond yields appear to have stabilized in the last week, or so, has cooled some of that speculation. But if there is momentum in the rise the heat could well be on again.
The Bank of Canada is not under any pressure to boost its benchmark rate when it makes its policy announcement on Wednesday. The latest inflation numbers are no threat and, again, employment figures are just 'good enough'.
However, the chair of the U.S. Federal Reserve believes there will be an interest rate hike in the States before the end of the year. Still, Janet Yellin says, it will be small and gradual with the key determining factors continuing to be employment and inflation.
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