Tariff-induced market chaos could lead to lower mortgage rates

Global markets tumbled Thursday in reaction to the latest round of U.S. tariff warfare, spurring fears of a global recession as many nations face a 50-per-cent reciprocal tariff on goods imported to the United States, along with a 10-per-cent baseline levy.

Donald Trump’s widening trade war will cause widespread economic pain. And although the U.S. President spared Canada from any new reciprocal tariffs in Wednesday’s announcement, our country will still face steep trade challenges as growth slows here, overseas and south of the border.

The only Canadians coming out ahead are, perhaps, those shopping for a fixed mortgage rate. That’s because pricing for this type of mortgage takes its cues from bonds – and bond yields have reacted to the latest tariff news by plunging to lows not seen in three years.