Poloz\u2019s speech before the Chamber of Commerce of Metropolitan Montreal<\/a>.<\/p>\nHousing market observers monitor the central bank\u2019s policy rate, also known as the key or overnight rate, because it, along with bond yields, influences mortgage rates in Canada. Since July 2017, the Bank of Canada has five times hiked the policy rate by 25 basis points.<\/p>\n\n
The most recent hike was in October, when the central bank increased the rate to 1.75 percent, where it has remained. Last year, many observers had anticipated the Bank of Canada would continue with its bearish approach and raise the policy rate more than once this year, but increasingly the consensus appears to be that borrows must brace for just one hike this year.<\/p>\n
\u201cWe expect just more rate hike this cycle, but not until December,\u201d writes Guatieri, who in his response to Poloz\u2019s speech outlines comments that support this view. \u201cHe (Poloz) repeated that households are more sensitive to higher rates due to elevated debt. He didn’t play up the recent rebound in oil prices, though this is one item that could improve the investment picture.\u201d<\/p>\n
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