Happy Holidays!

It certainly feels like winter out there these days.  I keep hearing that retail sales are down but judging by the malls I think we may be having a very strong December.

Real Estate continues to be hot even in the typically slower month of December.  There is still strong demand for houses and limited product on the market.

The Bank of Canada reviewed their interest rates this morning and they are keeping rates steady at .25%.  This means the prime rate is staying at 2.25% for the time being.  Here is the globe and mail article--------

Bank of Canada pledges low rates
The Bank of Canada sees a slightly broader global pickup, but not enough to change course. As expected, the central bank held its benchmark overnight rate at an historic low of 0.25 per cent this morning, and pledged to keep it there until mid-2010. Its statement today also highlighted "slightly more positive" global economic developments, though stressed the recovery remains fragile. Among the risks, the bank cited a more protracted global rebound than expected and "persistent strength in the Canadian dollar."
"The main drivers and the profile of the projected recovery in Canada remain consistent with the bank's views in [October]," the central bank said. "The Bank continues to expect economic growth to become more solidly entrenched over the projection period and inflation to return to the 2 per cent target in the second half of 2011. Conditional on the outlook for inflation, the target overnight rate can be expected to remain at its current level until the end of the second quarter of 2010 in order to achieve the inflation target."
As BMO Nesbitt Burns economist Michael Gregory put it, Mark Carney's Bank of Canada "is on hold until the end of June, but come next Canada Day the bank will be hoisting its hawkish colours amid all the Canadian flags."
Added Eric Lascelles, chief economics and rates strategist at TD Securities: "This report should dampen expectations for near-term rate hikes as the Bank of Canada's plan going forward seems to be absolutely unchanged. However, a close reading of the report does reveal some additional subtle strength and hawkish rhetoric that was not evident in earlier reports. For now, we remain comfortable with the opinion that the Bank of Canada will not begin removing traditional monetary stimulus until the fourth quarter of 2010."

Read the full article Globe and mail link

So in summary the Bank of Canada is pleased with the direction of the economy and they have reiterated their pledge to hold prime steady until mid 2010.  Variable rates are now at 2.15% and 5 year fixed are at 3.99%.