News item: “The world's biggest central banks are on the starting line of reversing a record string of interest rate hikes …”
If you are a regular reader of this website, News From Nexus or any other credible source of information about interest rates, then you know that the way they rise and fall is not unique to Canada. Typically, what happens in one country also happens in another, although the timing may vary slightly.
Next month, the Bank of Canada will make another announcement and if rate doesn’t drop slightly, it’s realistical to assume that it soon will…that it’s just a matter of time.
A story by Reuters, out of Frankfurt and Washington, reports that “banks on opposite sides of the Atlantic are likely to move in the smallest increments with periodic pauses, fearing that ultra-low unemployment could rekindle inflation rates still above their targets.”
Translation: The rise of interest rates over the past two-year period was big and quick; the fall will be slow and modest by comparison. Also, when the rates bottom out this time, it’s almost certain to be significantly higher than when the increases began, from a bottom of 0.25 per cent, which was an historic low.
Investors expect the world’s major banks to make cuts of 0.75 per cent by the end of the year. The next announcement from the Bank of Canada is scheduled for April 10.