Welcome to the latest episode of Make Money Count! On Monday, Donald Trump announced that he plans to enact tariffs on Canadian goods the moment he enters office. Is this the beginning of a huge trade war? Marcus and Justin break down the impact of tariffs on the Canadian economy and currency, and how changes in bond yields affect mortgage rates.

Episode Highlights

Tariffs and Their Toll on the Economy

Tariffs have long been a double-edged sword in global trade. On one hand, they protect domestic industries; on the other, they often increase costs for businesses and consumers. Recent trends reveal that higher tariffs can disrupt supply chains and drive up the prices of imported goods, contributing to inflation. For Canadians, this could mean higher costs for everyday essentials and ripple effects on industries like real estate, where affordability is already a major concern.

Bond Yields: The Foundation of Mortgage Rates

If you’re tracking mortgage rates, bond yields are the pulse to monitor. Mortgage rates are closely tied to the performance of government bonds, which reflect investor sentiment about economic stability and inflation. When bond yields rise, mortgage rates tend to follow suit. For homeowners or potential buyers, keeping an eye on these movements can help you decide the right time to lock in a rate. In uncertain economic times, understanding this relationship is crucial for making informed financial decisions.

The Canadian Dollar’s Performance and Purchasing Power

The value of the Canadian dollar doesn’t just affect travel expenses—it plays a significant role in our economic landscape. A weaker CAD increases the cost of imports, further fueling inflation, while, conversely, a stronger dollar boosts purchasing power. Fluctuations in the CAD can influence everything from food prices to real estate investments, underscoring the importance of staying informed about exchange rate trends.

Staying Smart in a Shifting Mortgage Market

With interest rates and economic conditions constantly in flux, navigating the mortgage market has become more challenging than ever. For instance, whether you’re a homeowner considering refinancing or a first-time buyer, flexibility and knowledge are your best tools. On the one hand, variable-rate mortgages may offer advantages in a declining rate environment, but on the other hand, fixed-rate options can provide peace of mind.

In these uncertain times, being informed is your best advantage. At Cannect, we’re here to give you the insights and solutions you need to manage today’s market. If you have questions or need personalized advice, don’t hesitate to reach out. Let’s move forward together.

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