the central bank hit pauseThat pause, though a strong indication the bank hoped the battle had been won, was anything but certain, as central bank governor Tiff Macklem made clear in a speech soon after the decision.. "It depends on whether the economy develops as we think it will and whether inflation continues to fall."
Investors certainly seem to think there's a chance. Trading in investments known as swaps, which bet on future central bank rates, imply there's about a 40 per cent chance of a small hike in the central bank's rate on Wednesday, taking it to 4.75 per cent.That's bad news for anyone with a mortgage, as lending rates that have also soared this year will be poised to go even higher.
Despite the dramatic rise in lending rates so far, only a small percentage of borrowers have actually felt their payments increase, since fixed rate borrowers tend to lock in for several years at a time, and even most variable rate loans have fixed payments that simply add years to the loan instead of increasing the payment when rates rise.
"That's a significant impact on anybody," he said. "Their payments are big and in one or two years they're going to be faced with, who knows, hopefully a lower rate, but perhaps even a higher rate." "It's definitely not ideal, but it's … doable," he told CBC News in an interview. "I mean, I'd prefer $850 to be going to vacations or stuff for my baby [but] at least I don't have to watch if an interest rate hike happens."