Trade War Uncertainty: No Immediate Impact on Canadian Mortgage Rates

The Canadian economy may be at risk due to an escalating trade war between Canada and the US, but the impact on mortgage rates is being treated as a short-term uncertainty.

According to CIBC deputy chief economist Benjamin Tal, markets are not yet convinced that the current escalation of tariffs will lead to a full-scale trade war.

Tal noted that investors believe the current animosity between Canada and the US is just posturing for further negotiations, and therefore are not adjusting their expectations around Bank of Canada interest rate decisions or bond yields.

However, Tal warned that if there isn't a trade deal by September 8th, when Canadian countertariffs on American goods are set to come into force, the market could unravel.