That’s the headline inflation number from today’s CPI report. Headline inflation is a YOY figure that includes volatile food and energy prices.
On the other hand, core inflation (the Bank of Canada’s key metric), is fairly buoyant at 1.8%. That’s just shy of the BoC’s 2% target.
Bond yields fell on the news. The 5-year GOC yield is down to 2.49% at last look–a four week low. For trader-types, key support is around 2.40%.
Yields have slowly drifted lower for the last week and a half. That may push some non-bank lenders closer to 4% again on 5-year fixed mortgages.
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Last modified: April 28, 2014
Does anybody see Big Banks lowering their posted rate by any?
I have a 5-year fixed locked in, rate guarantee until November… just curious if there’s a chance it may go down again…
Rob/Melanie -thanks for the update. Pls keep us posted if any lenders drop to 4% rate on a 5yr fixed. Cheers!
Rob can point out if I’m mistaken, but I believe “quick close, no frills” 5 yr fixed are available under 3.9..ie restrictions on prepayments and amort terms, while the standard 25/25 prepayment “frills” will still price out in the 4.1% range..
Now, can someone enlighten me why this is not called ‘Deflation’ (to make us all feel good ?)
Hi Jeff: The Big 5 are sticky with their posted rates. Unless yields move considerably, the banks would rather: a) alter their branch discretion (which is much easier); and/or b) keep their spreads fat.
Tricia: There are a few lenders near or below that level today for quick-closes. (No pre-approvals, 30-day rate hold max, etc.)
Dan: Depending on your province, closing timeframe, and qualifications, there are no-frills at 3.89% and frills under 4.10%. (Pre-approvals are higher)
John: The YOY comparison is this month’s CPI report was based on oil prices from last summer’s $147/bbl bubble. Going forward we’ll see headline inflation less skewed by this.
My question was referring to the absurdity of having a “negative” inflation. That is what deflation is, if I recall my economics right.
But, our leaders, and the things are getting rosy, and recession is over camp do not want the term deflation used, I guess.
Using this logic, may be we will have negative deflation when there is positive inflation.
Actually John, I think the term is “inverse deflation.” ;)
But seriously, if it were negative core inflation then we’d have problems. Negative “headline inflation”–not so much.