TD Canada Trust Change in Prime Lending Rate 4.00%

Effective October 22, 2008 TD Bank’s prime lending rate will be 4.00%.

 

In a highly anticipated rate cut, TD Canada Trust passed along the full savings to its customers. This rate applies to all Float Portions of previous HELOC accounts.

Bank Of Canada makes rate cut

In a move that was highly anticipated the Bank Of Canada lowered its key interest rate a quarter of a point today. The bank then hinted at future cuts with the next scheduled meeting in December.

None of the Major Canadian banks have announced any rate changes today, we will keep you posted on what is going on in the consumer market.

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Markets, dollar fall in wake of central bank rate cut

Eric Beauchesne

Canwest News Service

Tuesday, October 21, 2008

OTTAWA – Canada’s benchmark stock index quickly fell more than 200 points and the loonie nosedived more than a cent to the mid-82 cents US level on Tuesday in the wake of a quarter point interest rate cut by the Bank of Canada and its warning that more rate cuts will likely be needed to deal with the global financial crisis and expected recession.

“Three major interrelated developments are having a profound impact on the Canadian economy,” the central bank said in cutting its trendsetting overnight rate to 2.25 per cent. “First, the intensification of the global financial crisis has led to severe strains in financial markets,” it said, adding the need for banks to reduce their loan exposure will restrain growth for some time to come.

“Second, the global economy appears to be heading into a mild recession, led by a U.S. economy already in recession,” it said. “Third, there have been sharp declines in many commodity prices.

The rate cut, however, was not immediately matched by the chartered banks, even though an economist at one of them complained that the central bank should have cut its key rate even deeper, a view also held by labour economists.

“I think they did the right thing on direction but fell short on execution,” said Derek Holt, economist at Scotiabank, which is forecasting the Canadian economy is heading into a recession, something which the central bank stopped short of projecting.

The Bank of Canada remains too optimistic about the Canadian economy, especially in light of its acceptance that the U.S. is in recession and that global economy is heading into a mild one, Holt said. The bank should have cut its key rate by at least half a point, and maybe even three quarters of a point, he suggested, adding that it will have to cut rates again and by half a percentage point before year-end.

United Steelworkers economist Erin Weir went further, saying not only was the rate cut too little but also too late.

However, Weir criticized the chartered banks for their reluctance to match the central bank’s rate cut.

“The real motive for chartered banks to not match the Bank of Canada’s cut may be to widen the spreads between the rate at which they borrow from the Bank of Canada and the rates at which they lend to Canadians,” Weir said. “This is not only unfair to ordinary Canadians, but also severely undermines monetary policy.”

TD Securities analyst Charmaine Buskas said that while the rate cut fell short of what markets expected, she noted that the central bank made it clear there is more rate relief coming.

“It appears as though the bank is more than willing to do what it takes to shore up the economy,” Buskas said, adding that its accompanying statement suggests that it “is taking the situation very seriously” and could cut the target for its trendsetting rate to less than two per cent.

The Bank of Canada applauded actions by G7 countries, including Canada, to stabilize their financial systems, saying they will be key to resuming the flow of credit to support global economic growth, which will benefit Canada’s export-oriented economy which will be hurt by the global slump.

“The marked tightening in Canadian credit conditions in recent weeks will restrain business and housing investment,” it warned, saying it expects growth here to be sluggish until the spring before starting to recover through the rest of next year until it reaches above potential growth by 2010.

As a result of the economic weakness inflation will ease significantly to less than one per cent in mid-2009 before returning to its two per cent target by the end of 2010, the central bank projected.

Underscoring the Bank of Canada’s view that the U.S. is in recession was a report of a further drop in an index of overall economic activity last month deeper into what analysts said was already recession territory.

“The level of the index continues to suggest that a recession has begun,” said TD Securities analysts Ian Pollick, noting the Chicago Fed National Activity Index has been in negative territory for 10 consecutive months.

Meanwhile, a continuing slide in oil prices to less than $72 US a barrel weighed on both the currency and the Toronto Stocks Exchange’s main index, which was also facing profit-taking following a near 700-point gain on Monday.

However, on the bright side there was also further signs of an easing in the global credit crisis with as a key interbank lending rate continuing to ease from its recent peaks.

© Canwest News Service 2008

TD Prime Change Effective October 14th 2008

TD Canada Trust has made the following changes to rates:

* Decreased the TD Prime lending rate to 4.35%, effective October 14th 2008

This change affects the float portion of the HELOC product

Note: TD Mortgage Prime will change on November 1st which will impact the VIRM Products.

Today TD Canada Trust announced that it will be passing along more of the rate savings to consumers, it is strange to see rates move in ’stages’ but these are uncharted times to say the least.