A lot of analysis are saying the market has effectively "Priced In" a rate hike decision due July 12th 2017. An estimated rate hike coming in between 75-85% chance from what I've read, although some still believe it won't happen yet (TD).
For non-Canadians, it's been 7 years since Canada has increased interest rates, currently the BoC has it's rate at 0.5%
Naturally as interest rates go up, people are less likely to leverage invest, more likely to pull higher risk money out to pay down debt, or reallocate portfolio in anticipation. Several more factors to be considered.
What this means on our sector, is a downward pressure, once the hike decision comes into play, the market reacts accordingly.
Personally I believe the market will slightly dip, then rebound into short growth when the hike happens at 0.25% and nothing more absurd. Of course, chaos could come lose with debt-leverage on most Canadians, however, this will take 12-18 months to begin to transpire IMO.
What are your predictions?
Submitted July 10, 2017 at 09:02AM by SuicideFrenchFry