2023 Key Economic Dates To Watch
Happy New Year All!
I hope you enjoyed the holidays and managed to get in some good r&r!
There’s no question 2022 has been a volatile year, with the Canadian and global economy becoming more of a focus in our day to day business. Inflation soared and rates rose, as a result we saw definitive impacts on our real estate market. As we enter 2023, our eyes are focused on how effective these rate increases will be in curbing inflation while monitoring the potential for a recession or signs that we are returning to normalcy.
We have put together an economic calendar with key dates of importance to help guide you through the milestones of this upcoming year. We haven’t included every date, but are trying to highlight the most relevant that could impact both fixed and variable rates, as well as our market overall.
Here is a quick guide to these key dates:
Bank of Canada Rate: 8 dates spread across the year where the Bank of Canada provides an update on the economy, and updates their Overnight rate. Overnight rate directly affects the Prime rate and Variable rate mortgages, and could indirectly affect fixed rates if changes are different from market expectations.
Fed Rate (US): Similar to the bank of Canada Rate updates, the US Fed updates their Reserve rate. Although there is not a direct link to our Prime Rates, changes by the US Fed will influence the Bank of Canada as well as Fixed rates by impacting Bond Yield performance.
CPI/Inflation Report: These are monthly reports on how inflation was for the previous month. Included is a comparison to the past month as well as the previous year. These occur in both Canada and the US. This is a key metric, where we are targeting to see a decrease in the inflation rate for a sustained period before the Bank of Canada will reduce the overnight rate. Fixed rates could also see some trends downward if we see inflation cooling trends emerge in 2023
GDP: This stands for Gross Domestic Product, and is a measure of Canada’s economic performance. If we see growth cooling this may mean we’re headed for recession; in which case we may see bond yields drop potentially leading to lower fixed rates. If GDP strengthens unexpectedly, this will likely mean a surge in Bonds and subsequently fixed rates could rise.
Jobs Report: These reports look at both unemployment and labour wage inflation. Labour wage is a key metric for future overall inflation, and so the results could impact Bank of Canada decisions on whether sustained inflation-combating measures are needed or not.
Thanks again for your support in 2022, and looking forward to 2023.
Please don’t hesitate to reach out if ever you have questions on this topic.
Wishing you all the best and a fantastic 2023!
Warmest Regards,
Jill
*Source: Eran Obadia, Outline Financial