“The belief that rates will not go higher, or the lack of clarity, is reflected in the inverted yield curve,” Jackson said. “That means yields on longer-term Government of Canada bonds are lower than shorter maturities. At last check, one-year to three-year maturities are yielding 4.63%, five-year to 10-year maturities are yielding 3.74%, and yields on over-ten-year maturities are 3.56%.”
RBC Economics study shows Canadian spending slowing due to debt pressures. While spending is steady, early signs of weakness coincide with a slight unemployment rate increase.https://t.co/r5amlMW8vO#mortgagenws #mortgageindustry #householddebt #economy
— Canadian Mortgage Professional Magazine (@CMPmagazine) August 11, 2023
Household debt at a record high
Latest data from TransUnion showed that Canadian household debt has reached its peak so far during the second quarter, touching a record high of $2.34 trillion.
Of this, mortgage debt accounted for $1.73 trillion while non-mortgage debt totalled $604 billion.
“While some financial pressure has been offset through continued savings growth and strong employment, many Canadian consumers have accessed credit as a means to short-term liquidity,” said Matthew Fabian, director of financial services research and consulting at TransUnion Canada.
“The combined pressure of a high cost of living and elevated interest rates has created a payment shock, as the cost of debt has grown even heavier for some Canadian households.”