In the last week, we've seen two significant events impacting Canadian mortgage holders and potential purchasers:

1) The Bank of Canada (BoC) did not increase the overnight rate at their meeting on Wednesday March 8th. This was largely expected to be the case, with the BoC effectively announcing an upcoming pause in their previous update on January 25th. Nonetheless, it was a welcome relief for all of us with variable rate mortgages. This was following eight consecutive increases since early March 2022.

Everyone can take a collective breath.

2) Bond yields have dropped over the last handful of days. This is a result of three U.S. banks failing late last week (Silicon Valley Bank, Silvergate Bank and Signature Bank). Subsequent turmoil has spread to other regional US banks as investors worry about the stability of their financial institutions. Over the weekend the FDIC and the U.S. Federal Government have assured the deposits held by these institutions will be made whole, but fears of these issues contaminating other banks have halted the trading of dozens of banks today.

The situation in the U.S. has pushed Canada Bond yields down, which in turn can lower fixed mortgage rates sooner than anticipated (if bond yields continue to trend downwards).

This is a far cry from a week ago, when there were thoughts we may see another possible BoC increase in 2023. It's too early to tell for sure, but as of today, the market is pricing in two possible BoC RATE DROPS before July. 

Just another example of how hard the future is to predict. If you have any questions on any of this, please reach out. We will be sure to update as more information and trends become available.