That means it’s premature to speculate whether tariffs could drive a potential uptick in mortgage rates in early 2025 – and whether they’ll even come to pass, according to a mortgage industry executive.
Anthony Casa (pictured top), president and chief executive officer of UMortgage, told Mortgage Professional America that while he saw a good chance of further tariffs on China, the threatened measures against Canada could represent something of a “bargaining chip” as a prelude to trade negotiations during the Trump presidency.
“Canada is obviously a key import and export partner. Realistically, I don’t expect [tariffs] to have as big of an impact on rates as has been cited,” Casa said. “It’s more of a negotiating situation, so I don’t expect it to have a substantial [effect] on interest rates.
“I think whatever the short-term reaction is based upon, the speculation will wear off and as the Federal Reserve’s policy continues to lean towards lowering rates, I think we’ll see the rate trajectory decrease substantially.”
US president-elect Donald Trump has issued a bombshell warning to impose a 25% tariff on all products entering the country from Canada and Mexico starting on the first day of his new administration.https://t.co/5PCWZeELRr
#TradePolicy #USCanadaRelations
— Canadian Mortgage Professional Magazine (@CMPmagazine) November 26, 2024
Lack of recent rate volatility offers cause for optimism
The Canadian dollar plunged in the wake of Trump’s statement, issued via Truth Social on Monday. But while US Treasury yields ticked higher, the bond market appears to be taking a cautious approach on the possibility of January tariffs.
