Predicting lower rates has become a national pastime. With millions of mortgage shoppers becoming armchair forecasters, rate-cut expectations have led to a higher-than-normal share of Canadians considering short-term mortgages. Yet, for months, such borrowers have been frustrated by the fact that longer-term rates (e.g., 5-year terms) have fallen much

Two-year bond traders are going all-in on rate-cut bets. Exhibit A is the following chart. It shows Canada's 2-year yield, a leading indicator for BoC rates. It just made an 8-month low on Friday after failing to rebound above its 18-month average. To some, technical analysis might seem

In the last three months of 2023, the 4-year swap rate—a leading indicator of fixed mortgage pricing—plunged 125 bps. The descent trimmed down fixed rates by about 60 bps. For the average Joe/Josephine getting a new $300,000 mortgage, that means a cool $8,700 that they

⏩The short of it: In 2024, the BoC should loosen its grip and give rates a snip. The market's magic 8-ball now shows 5-6 target rate cuts in 2024. Until that seems imminent, the BoC will keep playing hardball—trying to deter premature rate celebrations and home-buying exuberance.