BoC cuts rates by another .50% | General financial discussion | Discussion forum

This is ridiculous...

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They're pulling the trigger too quick ... this is the second cut, in 9 days❗

If they keep this pace up, they'll soon run out of rate cutting room.

It seems that even the BoC is in COVID-19 'Panic Mode' ... Sad

Yikes. Are savings account and GIC rates expected to go down even more?

I'm just about to fund a 5 year GIC at 3%. Application already submitted so I'm guaranteed the rate even if it goes down today. Nothing higher than that.

Dean said
.
They're pulling the trigger too quick ... this is the second cut, in 9 days❗

If they keep this pace up, they'll soon run out of rate cutting room.

It seems that even the BoC is in COVID-19 'Panic Mode' ... Sad   

I called this; I thought they'd wait until April 15th to do another 50 bps cut, but for what it's worth, economists are now forecasting a further 50 bps cut before the end of June, taking us to 0.25%. At that point, I think they'll hold the line, though there's a chance we could go to 0%.

More likely, though, will be the Bank of Canada becoming lender to the Government of Canada at 0-0.25% to finance infrastructure spending and/or quantitative easing.

Cheers,
Doug

Well...at least my mortgage is down to 2%

Alexandre said
"No one should have to worry about paying rent, buying groceries ... because of COVID-19. We will help Canadians financially."*

* Except seniors on fixed income.  

Can't speak for the price of groceries, but I expect rents to decrease or stay stagnant, possibly through additional provinces bringing in temporary rent controls. In terms of utilities, I expect the provincial utilities commissions to order rate reductions to the monopoly utility companies and even the Crown corporation monopoly auto insurers. So, you will see costs go down. However, I hate that term "seniors on fixed income." That applies to any senior.

If you are on full GIS and Spouses Allowance, then we'll talk. That's a senior on a fixed income. 😉

Cheers,
Doug

ReX said

Are we too rich of a liberal to discern what Aleaxandre is talking about?  

No.

Cheers,
Doug

Well, s*#t. This isn’t going to fix anything. It’s only going to delay the outcome and make that outcome more disastrous. The problem with the situation is workplaces shutting down, events canceled and travel/ tourism closed. It’s basically lost jobs and income. Lower interest rates isn’t going to cure any of that. The people in power are a joke.

I agree with the comments here. Using a quote from Poloz

"By cutting its overnight rate target, the central bank hopes to boost the economy by prompting large banks and financial institutions to cut prime lending rates and free up money for households to spend.

“In situations like this, it’s consumer and business confidence which tend to erode and that causes decisions to slow down regardless of how much capacity there is in the system,” Poloz said."

Our households are overburdened in debt already. lowering interest rates won't cause people to spend money when they are not venturing out because of the virus.

Rick, I certainly sympathize with those who planned assuming reasonable interest rates, the extreme low ones we have today could not have been forseen.

I think it's just the usual response we're seeing here, i.e. lower interest rates when the economy tanks for whatever reason. And in a society where individuals right on up to all kinds of institutions are in debt it doesn't seem like a bad idea.

Vatox, that money people are not spending now can be used to pay off some debts, or else can be spent whenever things get going again, it won't disappear. And that's the idea behind temporary measures to help, it's just for a while (hopefully) that some workers who can't work right now may need help to pay the bills. Not saying I agree with the measures, just trying to express my understanding of their intent.