Two Interest Rate Hikes In 2017, Predicts HSBC


HSBC is predicting two interest rate increases by the Bank of Canada in 2017.

The first is widely expected to happen on Wednesday. HSBC predicts the second will take place in October.

If HSBC is proven correct in their prediction, the consequences for the Canadian economy could be serious.

As I reported yesterday, a study by MNP shows that “Over seventy percent of Canadians rate their ability to cope with a [one per cent] interest rate increase as less than optimal.” 

Additionally, “The vast majority of Canadians (77 per cent) would have difficulty absorbing an additional $130 per month in interest payments on debt.”

Even worse, 27% say they are already “in over their heads” on mortgage payments, and two interest rate hikes could cause substantial damage.

HSBC predicts rates will increase from .50% to .75% in June, and from .75% to 1% in October. While this would not be the full 1% increase mentioned above, it could nevertheless put millions of Canadians into further financial difficulty – which demonstrates how fragile our economy has become.

No margin for error

With debt now the main driver of growth in our economy – and many other economies around the world – we are seeing that people have almost no financial margin for error. The “solution” to the 2008 financial crisis only pushed the day of reckoning further down the road. Our “leaders” and “experts” managed to “save” a system made weak by excessive debt by adding even more debt to the system. Now, central banks are trying to figure out how why super low interest rates aren’t leading to increased growth, and they flail around in ignorance hoping their next move will somehow “fix everything,” instead of addressing the deep underlying sickness in our economy and broader economic system.

Spencer Fernando

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2 comments Add yours
  1. I WAS SHOCKED TO HERE 55% OF CANADIANS HAVE NO SAVINGS AND ONLY HAVE $200.00 PER MONTH LEFT OVER AFTER BILLS. SO THE QUESTION COMES BY RAISING THE BANK OF CANADA RATE WHO BENEFITS…….THE BANKS AND LENDERS…….WHO GETS HURT THE MOST……..ALL MORTGAGES, ALL STUDENT LOANS, ALL GOVERNMENT LOANS OR MORE TAX MONEY REQUIRED TO SERVICE OUR OUT OF CONTROL SPENDING BY THE LIBERALS…….DOES ANYONE ELSE FEEL LIKE THEY ARE BEING HELD HOSTAGE BY MORONS…….

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