Market Update - September 2019

We heard the news this morning that U.S. Federal Reserve had
cut their main interest rate again by 0.25%. This is in direct
contrast to the
Bank of Canada (BoC)'s unexpected decision to
hold their k
ey interest rate during the scheduled meeting on
September 4th
.

Most
economists have predicted that a rate cut is imminent in
Canada
due to concerns about the trade war and the slowing
global economy. The main reasons given by the Bank of Canada
for its rate decision
early this month were that inflation in
Canada was steady and right on track at 2% and that the GDP
growth in the second quarter was 3.7%, exceeding the
expectation of 3%. However, most economists are still
predicting a rate cut soon and possibly as early as the end of
Oct as there are early signs of a slow-down in the economy
caused by less global demand for our Canadian goods caused
by the international trade wars. As a result, we have seen
mortgage rates hitting record lows without a rate cut by the
central bank!  

Another positive note is that the newly announced First Time
Home Buyer Incentive Program was formally launched on
September 2nd! We briefly discussed the program details and
eligibility in our last newsletter. I don’t think the program will
last too long before it either gets cancelled by the Conservative
government if the Liberals fail to get reelected or the pool of
funds is used up. We encourage first-time home buyer to check
the program and take advantage of the free down payment
generously offered under the program.

Let’s hope we have a great Autumn!


Sincerely,
Michelle Feng, MBA, CFP
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