The dovish tone of the Fed’s monetary policy committee meeting has raised expectation that the US will begin increasing interest rates in September with small incremental rises to follow. Don Pittis, senior business producer at CBC, says that within Janet Yellen’s speech there was a warning for Canadians over mortgage rate rises, perhaps not in the short-term but for the longer-term trend. He writes that longer-term home loans are tied to the rate of US bonds and says that for those with long mortgages to keep up with the rises, it would be prudent to calculate 1 per cent of the principal amount of the loan and add that to yearly payments until the US economy and inflation rate returns to normal.
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