Thank-You Mr. Carney
Mark Carney on Thursday was live on BNN and gave some unexpected news, and even more unexpected advice on mortgages for Canadians. Watch the video here
Here are some highlights:
- Carney effectively is calling the recession OVER
- He expects the economy to start growing, albeit very slowly, this quarter.
- We will end the year with a contraction of 2%
- He warned we will still have a long road ahead, in other words there will not be blazing growth until well past 2010 and into 2011
- If he is right although this recession was particularly nasty in places it only lasted three quarters which is one of the shortest downturns in history
- According to Mr. Carney the US economy is also at it’s trough. Due to our strong trade relationship as their economy sputters up our exporters stand to gain, even with a strong dollar. Increased business is better then no business I guess
- A stronger Canadian dollar could put a damper on inflation and unfortunately also keep the economic recovery slower and more prolonged.
As for his advice for Canadians considering the decision between variable and fixed, when asked directly by a reporter what his advice would be he commented as follows
- He reminded that he has a “conditional commitment” to keep the bank rate at .25% until mid 2010. Hint: variable is still a good bet
- He cautioned as I have been very often about Canadians being sure they can afford renewals of their mortgages when interest rates reach a more normal level in the years ahead as we climb out of these emergency times.
Remember to talk to one of our agents about our inflation hedge mortgage strategy
