Interviewed on the program “À vos affaires”, Simon Brière returned to the impact of the increase in the key rate on the population.
• Read also: Moving: tenants looking for cheaper rents
• Read also: The key rate rises to 1.5%
“We have a form of recklessness, we are not aware of what is happening,” says Simon Brière, market strategist at RJ O’Brien.
Rate hikes, and in particular that of the key rate, are not ready to stop.
“An increase of 50 basis points” is expected at the next meeting of the central bank in July, warns Mr. Brière.
“When we look at inflation projections, we tend to say that if we are at 6% inflation, interest rates should not be so far from that,” explains the expert. , but “here we have a lot of inflation and expectation of inflation, my interest rates are still historically very low.”
To better visualize the impact of a rising key rate, here are theoretical projections on the increase in a mortgage loan.
On a $400,000 mortgage over 25 years, a monthly payment on a 2.9% rate would be closer to $1,870, compared to around $2,260 on a 4.7% rate, as we can see today.
The price of basic necessities is also experiencing a great leap, such as rice, corn or rice. This can be explained by several factors, in particular a bad season which reduced production, which, by the law of supply and demand, caused prices to rise.
Find the full interview with Simon Brière, market strategist at RJ O’Brien in the video above.