US Prime Rate Cut Unlikely to Spread North

Yesterday’s announcement of a cut to a key US interest rate is unlikely to be mirrored in Canada, say financial experts, as the loonie soars and the Canadian housing market holds strong.

The U.S. Federal Reserve announced a half-point cut to its federal funds rate on Tuesday, in hopes of avoiding a nation-wide recession. The move comes in the middle of a spiralling housing market and the first slump in the labour market in four years.

U.S. recession fears have wreaked havoc with stock markets worldwide, but Canada’s Central bank is expected to hold interest rates steady to ward off inflation in the midst of a strong economy, according to the Canadian Press.