Investor Presentaiton
Households Can Sustain Higher Rates
Real interest rates are still negative and will turn only mildly positive in 2019
⚫ Scotiabank Economics expects the Bank of Canada to raise its target overnight rate
an additional 100 bps by Q1/2020
Average mortgage borrowers have only just begun renewing their loans at higher
interest rates
Further Rate Hikes Ahead from BoC & Fed
9
%
7
Fed Funds
Target Rate
(Upper Limit)
5
+
3
2
1
0
93
98
ВОС
Little Change in 5-yr Mortgage Rates at Renewal
50
5-yr difference, basis points
0
-50
-100
forecast
-150
Overnight
Target Rate
-200
-250
-300
03
08
13
18
Sources: Scotiabank Economics, Haver Analytics.
10 11 12 13 14 15 16 17 18 19
Sources: Scotiabank Economics, CMHC.
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