Bank of Canada delivers growth and security to retirement portfolios
BNN Bloomberg
Another interest rate hike, another crushing blow for borrowers, and another reward for savers.
In the battle to quell inflation, the Bank of Canada increased its benchmark rate this week for the 10th time since March 2022 to an even five per cent.
And it doesn’t appear to be over. Swaps – insurance against interest rate fluctuations traded on the options market – imply there is a better than 75 per cent chance of another increase at the central bank’s next meeting in September.
As it stands, borrowing rates and yields on fixed income have skyrocketed by about 4.75 per cent in less than two years. Prime lending rates at the big Canadian banks are now at 7.2 per cent, and payouts on one-year guaranteed investment certificates (GICs) are now as high as 5.5 per cent.
