Toronto, Canada, August 10, 2015 – Canadalend.com , the leading low-cost, private mortgage solution provider in the country, reacts to the U.S. Federal Reserve’s latest policy meeting and says ultra-low lending rates in Canada will stay for the foreseeable future; benefiting first-time home buyers and property owners looking to refinance.
On Wednesday, July 29, the U.S. Federal Reserve released its monetary policy statement. Many people were looking for indications on when the Federal Reserve is going to start raising its key lending rate. While many expect rates will start to rise in September, it seems likely a rate may not come until 2016,” says Bob Aggarwal, President of Canadalend.com. “What the Federal Reserve does matters to Canadians because our two economies are closely linked and our monetary policies tend to move in step.”
According to the minutes of the Federal Reserve’s July meeting, U.S. economic activity has been expanding moderately. It also notes that household spending has been moderate and the housing sector is showing additional improvement. At the same time, the Federal Reserve adds that it continues to see the risks to the outlook for economic activity and the labour market. (Source: Federalreserve.gov, press release, “Federal Reserve’s Statement,” July 29, 2015; http://www.federalreserve.gov/newsevents/press/monetary/20150729a.htm)
“Despite its concerns, the Federal Reserve believes the U.S. economy is strong enough to withstand a round of interest-rate hikes starting this year. But raising rates prematurely would be detrimental and could jeopardize the still-fragile U.S. economy,” Aggarwal adds. “There are many unforeseen events that can turn an economy’s fortunes around. Case in point: the plunge in oil prices and collapse in commodities prices turned Canada from one of the world’s strongest economies to one on the verge of a recession.”
Aggarwal explains that similar events could derail the U.S. economy and change the Federal Reserve’s somewhat positive outlook. A strong U.S. dollar and moderate economic growth is not the healthiest environment for a tighter monetary policy. At the same time, the Bank of Canada has said it expects its monetary policy to lag that of the U.S Federal Reserve’s. Even if the Federal Reserve does hike its overnight lending rate in September, the Bank of Canada, thanks to five consecutive months of economic contraction, will not raise Canadian rates.
“As a result, I expect that Canada’s fixed and variable mortgage rates will stay at ultra-low levels for the foreseeable future. This continues to be excellent news for Canadians looking to get onto the property ladder and those looking to refinance, or those looking to consolidate their debt,” Aggarwal concludes.
Canadalend.com is one of the largest, most trusted private mortgage brokers in Canada, with skilled independent, licensed professionals helping Canadians coast-to-coast.
Canadalend.com provides its clients with residential and commercial mortgages, home equity credit, debt consolidation, and addressing financing concerns. To learn more about Canadalend.com, visit the web site at www.Canadalend.com .