Mark Carney, the new Bank of Canada Governor makes his first interest rate announcement tomorrow. The fun part is watching all the economists struggling to figure out what he will do.Now to be sure everyone knows he is dropping rates, he said as much a few weeks ago in Vancouver. The question is will he go two .25% cuts or one .50% cut tomorrow.
One thing we know is that his decision is coming on the heels of some disturbing economic news. One, our economy had a very low growth rate in the final quarter and two, for the first time since 1992 we had a current account deficit, which means we bought more goods from other countries then we sold. Anothe stake in the heart of Canada’s manufacturing sector.
For what it is worth I see Carney going .50% tomorrow. Good times for variable rate mortgages.
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