With the market pricing over a 90 per cent probability, the U.S. Federal Reserve will raise interest rates at their December meeting.
The question to be asked – which was discussed previously back in May and June of 2013 – is, and was: Are we finally going to enter a period of higher interest rates? In hindsight of course, that discussion was a little early back in 2013.
For consumer angle, the big story is mortgages, and certainly yesterday following the Royal Bank of Canada raising their posted rates for fixed rate mortgages, the big one being the five year by 30 basis points to 2.94 per cent.
That move in line with the 21 basis point climb we saw in the Government of Canada Five Year Bond.
Watching similar activity in the US, where certainly their U.S. Treasury market has acted as the catalyst for this swift action in the mortgage market, and telling a very similar story where the average 30-year fixed rate mortgage has climbed nearly 50 basis points to 4.02 per cent.