adplus-dvertising
Connect with us

News

Bank of Canada hikes benchmark interest rate again, to 3.25% – CBC News

Published

 on


The Bank of Canada hiked its trendsetting interest rate by three-quarters of a percentage point on Wednesday, the latest move by the central bank in its mission to rein in runaway inflation.

After slashing its rate to near zero in 2020 to help stimulate the economy in the early days of the pandemic, Canada’s central bank has moved aggressively to raise lending rates to try to cool red-hot inflation, which has risen to its highest level in decades.

The bank’s rate impacts the rates that Canadian consumers and businesses get from their banks on things like mortgages, lines of credit and savings accounts.

At the start of the year, the bank’s rate was 0.25 per cent. After Wednesday’s move, it’s now at 3.25 per cent. That’s the highest level for the bank’s rate since early 2008, before the financial crisis.



While Canada’s inflation rate eased somewhat last month from its 30-year high of 8.1 per cent, the bank noted in its decision that most of that decline was due to gas prices, while the rest of the economy still saw “a further broadening of price pressures, particularly in services.”

That persistent underlying inflationary pressure is a big reason why “the policy interest rate will need to rise further,” the bank said, noting that it “remains resolute in its commitment to price stability and will continue to take action as required to achieve the two per cent inflation target.”

The move was widely expected by economists who monitor the bank. While the bank has now hiked its rate five times this year, economists think even more rate hikes are coming before the end of this year.

‘Aggressive’ series of hikes

Jimmy Jean, vice-president and chief economist with financial services conglomerate Desjardins Group, says the bank is making it crystal clear that it is committed to raising lending rates for as long as it takes to get inflation back down to below three per cent.

Five large rate hikes in barely six months, “by any historical standard is a very aggressive tightening cycle, but what the bank is saying today is that this is not over,” Jean said in an interview with CBC News on Wednesday.

Jean says it typically takes up to two years for the impact of higher rates to be fully felt in the economy, which means he thinks high rates will stick around through 2023 at least, even if they come at a cost of tipping the economy into recession.

“We’re already having the highest interest rates we’ve had since 2007 and it’s going to be very difficult to think that this won’t have a high impact on consumer budgets and even possibly on things like insolvencies,” he said.

WATCH | Expect even more rate hikes to come, economist says:

BOC’s big rate hike not the end, says economist

6 hours ago

Duration 4:47

The Bank of Canada’s ‘aggressive’ language along with its 75-basis-point boost in the bank rate sends the message that further interest rate hikes are ahead to bring down inflation, says Douglas Porter, chief economist for the Bank of Montreal.

The move will mean anyone with a variable rate loan is likely to see their payment change in the coming days to keep up with the central bank’s move. Two of Canada’s biggest banks, RBC and TD, raised their prime lending rates by the same amount the central bank did, effective Thursday. The others are expected to quickly follow suit.

Many mortgage holders have already felt those increases multiple times this year, as rates on variable rate loans have moved from below two per cent at the start of the year to in excess of four and in some cases five per cent today.

‘Trigger rate’ imminent for many loans

A large group of Canadian borrowers that has so far been relatively immune from rate hikes will feel this one, however, because of how those loans are structured.

Most variable rate mortgages give borrowers the option to keep their payment fixed, even if the rate changes. As interest rates increase, the amount of each payment that goes to paying down the principal gets reduced, while more and more goes toward the interest. That extends the length of the loan, even as the size of the regular payment doesn’t increase.

Eventually, that spread becomes so large that the loan payment becomes interest-only, at which point the payment terms have to be adjusted. It’s known as a trigger rate and “every mortgage broker in Canada and every bank … is getting a constant barrage of calls,” about it right now, mortgage broker Ron Butler says.

Ron Butler runs Butler Mortgage in Mississauga, Ont. (Laura MacNaughton/CBC)

The exact point a mortgage will be triggered will depend on the loan, but with rates increasing so far and so fast, many of them either already have tripped over the line or are about to.

Butler says as recently as six months ago, it wasn’t hard to get a loan charging about 1.5 per cent. But with five large rate hikes since March, that same loan today is now charging four per cent or likely more.

At that point, the original loan payment isn’t even enough to cover the interest portion — never mind paying down the balance a little.



“Clients who have a variable rate mortgage that have a static payment are worried that eventually they will hit a trigger point in their contract and their payments will increase,” Butler said.

‘I really have to buckle down’

Debbie Henry is one of them. Henry, who lives in the Toronto area, took out a variable rate loan in November of last year, that came with a fixed payment of $805 every two weeks. While her payment hasn’t changed yet, she is aware that her loan has a trigger point, and she’s worried she may soon cross it.

As things stand, she says she thinks her mortgage payment is effectively going entirely to the interest portion, and not paying down any principal at all.

“If it’s at that trigger rate I really have to buckle down,” she told CBC News in an interview. “I don’t want to be anxious about the mortgage because one way or another it’s going to get paid.”

Anshu Khanna has a fixed payment on a variable-rate loan for a property she owns in downtown Toronto, and she says her trigger rate hasn’t been activated yet.

“If it keeps going to a point where they have to raise the actual monthly payment then it’s going to start to pinch for sure,” she told CBC News in an interview. “We’ll see what happens.”

WATCH | Mortgage holders share their thoughts about rate hikes:

Mortgage holders nervous about higher rates

2 hours ago

Duration 1:45

On the streets of Toronto on Wednesday, many home owners told CBC News about their anxieties about the Bank of Canada’s rapid series of rate hikes this year.

It’s hard to tell exactly how many people are in the same boat, but data from the Bank of Canada suggests that roughly one third of all mortgages in Canada are variable rate loans, but within that, two-thirds of them have a fixed payment.

Canada’s biggest lender, the Royal Bank of Canada, estimated last week that it has about 80,000 home loans on its books that are soon to hit their trigger point. “Our records indicate you may be approaching your Triggering Interest Rate — a moment when your regular payment is no longer enough to cover the interest portion on your mortgage,” the bank told some of its mortgage holders in a recent letter obtained by CBC News.

“If this event occurs, your mortgage payment will automatically increase,” the letter said.

Of those affected, the average payment is likely to increase by about $200 a month, the bank’s chief risk officer Graeme Hepworth said on a call with financial analysts last month to discuss the bank’s quarterly results.

Adblock test (Why?)

728x90x4

Source link

Continue Reading

News

STD epidemic slows as new syphilis and gonorrhea cases fall in US

Published

 on

 

NEW YORK (AP) — The U.S. syphilis epidemic slowed dramatically last year, gonorrhea cases fell and chlamydia cases remained below prepandemic levels, according to federal data released Tuesday.

The numbers represented some good news about sexually transmitted diseases, which experienced some alarming increases in past years due to declining condom use, inadequate sex education, and reduced testing and treatment when the COVID-19 pandemic hit.

Last year, cases of the most infectious stages of syphilis fell 10% from the year before — the first substantial decline in more than two decades. Gonorrhea cases dropped 7%, marking a second straight year of decline and bringing the number below what it was in 2019.

“I’m encouraged, and it’s been a long time since I felt that way” about the nation’s epidemic of sexually transmitted infections, said the CDC’s Dr. Jonathan Mermin. “Something is working.”

More than 2.4 million cases of syphilis, gonorrhea and chlamydia were diagnosed and reported last year — 1.6 million cases of chlamydia, 600,000 of gonorrhea, and more than 209,000 of syphilis.

Syphilis is a particular concern. For centuries, it was a common but feared infection that could deform the body and end in death. New cases plummeted in the U.S. starting in the 1940s when infection-fighting antibiotics became widely available, and they trended down for a half century after that. By 2002, however, cases began rising again, with men who have sex with other men being disproportionately affected.

The new report found cases of syphilis in their early, most infectious stages dropped 13% among gay and bisexual men. It was the first such drop since the agency began reporting data for that group in the mid-2000s.

However, there was a 12% increase in the rate of cases of unknown- or later-stage syphilis — a reflection of people infected years ago.

Cases of syphilis in newborns, passed on from infected mothers, also rose. There were nearly 4,000 cases, including 279 stillbirths and infant deaths.

“This means pregnant women are not being tested often enough,” said Dr. Jeffrey Klausner, a professor of medicine at the University of Southern California.

What caused some of the STD trends to improve? Several experts say one contributor is the growing use of an antibiotic as a “morning-after pill.” Studies have shown that taking doxycycline within 72 hours of unprotected sex cuts the risk of developing syphilis, gonorrhea and chlamydia.

In June, the CDC started recommending doxycycline as a morning-after pill, specifically for gay and bisexual men and transgender women who recently had an STD diagnosis. But health departments and organizations in some cities had been giving the pills to people for a couple years.

Some experts believe that the 2022 mpox outbreak — which mainly hit gay and bisexual men — may have had a lingering effect on sexual behavior in 2023, or at least on people’s willingness to get tested when strange sores appeared.

Another factor may have been an increase in the number of health workers testing people for infections, doing contact tracing and connecting people to treatment. Congress gave $1.2 billion to expand the workforce over five years, including $600 million to states, cities and territories that get STD prevention funding from CDC.

Last year had the “most activity with that funding throughout the U.S.,” said David Harvey, executive director of the National Coalition of STD Directors.

However, Congress ended the funds early as a part of last year’s debt ceiling deal, cutting off $400 million. Some people already have lost their jobs, said a spokeswoman for Harvey’s organization.

Still, Harvey said he had reasons for optimism, including the growing use of doxycycline and a push for at-home STD test kits.

Also, there are reasons to think the next presidential administration could get behind STD prevention. In 2019, then-President Donald Trump announced a campaign to “eliminate” the U.S. HIV epidemic by 2030. (Federal health officials later clarified that the actual goal was a huge reduction in new infections — fewer than 3,000 a year.)

There were nearly 32,000 new HIV infections in 2022, the CDC estimates. But a boost in public health funding for HIV could also also help bring down other sexually transmitted infections, experts said.

“When the government puts in resources, puts in money, we see declines in STDs,” Klausner said.

___

The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

Source link

Continue Reading

News

World’s largest active volcano Mauna Loa showed telltale warning signs before erupting in 2022

Published

 on

 

WASHINGTON (AP) — Scientists can’t know precisely when a volcano is about to erupt, but they can sometimes pick up telltale signs.

That happened two years ago with the world’s largest active volcano. About two months before Mauna Loa spewed rivers of glowing orange molten lava, geologists detected small earthquakes nearby and other signs, and they warned residents on Hawaii‘s Big Island.

Now a study of the volcano’s lava confirms their timeline for when the molten rock below was on the move.

“Volcanoes are tricky because we don’t get to watch directly what’s happening inside – we have to look for other signs,” said Erik Klemetti Gonzalez, a volcano expert at Denison University, who was not involved in the study.

Upswelling ground and increased earthquake activity near the volcano resulted from magma rising from lower levels of Earth’s crust to fill chambers beneath the volcano, said Kendra Lynn, a research geologist at the Hawaiian Volcano Observatory and co-author of a new study in Nature Communications.

When pressure was high enough, the magma broke through brittle surface rock and became lava – and the eruption began in late November 2022. Later, researchers collected samples of volcanic rock for analysis.

The chemical makeup of certain crystals within the lava indicated that around 70 days before the eruption, large quantities of molten rock had moved from around 1.9 miles (3 kilometers) to 3 miles (5 kilometers) under the summit to a mile (2 kilometers) or less beneath, the study found. This matched the timeline the geologists had observed with other signs.

The last time Mauna Loa erupted was in 1984. Most of the U.S. volcanoes that scientists consider to be active are found in Hawaii, Alaska and the West Coast.

Worldwide, around 585 volcanoes are considered active.

Scientists can’t predict eruptions, but they can make a “forecast,” said Ben Andrews, who heads the global volcano program at the Smithsonian Institution and who was not involved in the study.

Andrews compared volcano forecasts to weather forecasts – informed “probabilities” that an event will occur. And better data about the past behavior of specific volcanos can help researchers finetune forecasts of future activity, experts say.

(asterisk)We can look for similar patterns in the future and expect that there’s a higher probability of conditions for an eruption happening,” said Klemetti Gonzalez.

___

The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

The Canadian Press. All rights reserved.

Source link

Continue Reading

News

Waymo’s robotaxis now open to anyone who wants a driverless ride in Los Angeles

Published

 on

 

Waymo on Tuesday opened its robotaxi service to anyone who wants a ride around Los Angeles, marking another milestone in the evolution of self-driving car technology since the company began as a secret project at Google 15 years ago.

The expansion comes eight months after Waymo began offering rides in Los Angeles to a limited group of passengers chosen from a waiting list that had ballooned to more than 300,000 people. Now, anyone with the Waymo One smartphone app will be able to request a ride around an 80-square-mile (129-square-kilometer) territory spanning the second largest U.S. city.

After Waymo received approval from California regulators to charge for rides 15 months ago, the company initially chose to launch its operations in San Francisco before offering a limited service in Los Angeles.

Before deciding to compete against conventional ride-hailing pioneers Uber and Lyft in California, Waymo unleashed its robotaxis in Phoenix in 2020 and has been steadily extending the reach of its service in that Arizona city ever since.

Driverless rides are proving to be more than just a novelty. Waymo says it now transports more than 50,000 weekly passengers in its robotaxis, a volume of business numbers that helped the company recently raise $5.6 billion from its corporate parent Alphabet and a list of other investors that included venture capital firm Andreesen Horowitz and financial management firm T. Rowe Price.

“Our service has matured quickly and our riders are embracing the many benefits of fully autonomous driving,” Waymo co-CEO Tekedra Mawakana said in a blog post.

Despite its inroads, Waymo is still believed to be losing money. Although Alphabet doesn’t disclose Waymo’s financial results, the robotaxi is a major part of an “Other Bets” division that had suffered an operating loss of $3.3 billion through the first nine months of this year, down from a setback of $4.2 billion at the same time last year.

But Waymo has come a long way since Google began working on self-driving cars in 2009 as part of project “Chauffeur.” Since its 2016 spinoff from Google, Waymo has established itself as the clear leader in a robotaxi industry that’s getting more congested.

Electric auto pioneer Tesla is aiming to launch a rival “Cybercab” service by 2026, although its CEO Elon Musk said he hopes the company can get the required regulatory clearances to operate in Texas and California by next year.

Tesla’s projected timeline for competing against Waymo has been met with skepticism because Musk has made unfulfilled promises about the company’s self-driving car technology for nearly a decade.

Meanwhile, Waymo’s robotaxis have driven more than 20 million fully autonomous miles and provided more than 2 million rides to passengers without encountering a serious accident that resulted in its operations being sidelined.

That safety record is a stark contrast to one of its early rivals, Cruise, a robotaxi service owned by General Motors. Cruise’s California license was suspended last year after one of its driverless cars in San Francisco dragged a jaywalking pedestrian who had been struck by a different car driven by a human.

Cruise is now trying to rebound by joining forces with Uber to make some of its services available next year in U.S. cities that still haven’t been announced. But Waymo also has forged a similar alliance with Uber to dispatch its robotaxi in Atlanta and Austin, Texas next year.

Another robotaxi service, Amazon’s Zoox, is hoping to begin offering driverless rides to the general public in Las Vegas at some point next year before also launching in San Francisco.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Trending