This is relatively unsurprising given the CPI reading yesterday. Hopefully the statement about two more rate hikes in the offing is contingent upon the situation as our develops and not a foregone...
This is relatively unsurprising given the CPI reading yesterday. Hopefully the statement about two more rate hikes in the offing is contingent upon the situation as our develops and not a foregone decision.
Not very happy about that. What's a bit frustrating is that here in Canada. there are TWO housing markets that are extremely heated - Toronto and Vancouver. The rest of the country has some warm...
Not very happy about that. What's a bit frustrating is that here in Canada. there are TWO housing markets that are extremely heated - Toronto and Vancouver. The rest of the country has some warm spots, but starter homes aren't going for a million dollars in Regina, Saskatchewan (where you can still buy small old single family homes for 50k). So the Bank of Canada follows the Fed and keeps raising rates with the hope that it will cool off pricing in those overheated markets and bring down overall debt loads, meanwhile the rest of Canada also pays a heavy price with far less need for the cooling effect.
It's getting pricey out there. But inflation SHOULD be dropping - we've certainly been watching our bottom line after multiple interest rate raises.
BoC doesn't care about the housing market. If BoC sees that inflation is above target, they will adjust rates upward. If they see inflation is below target, they will adjust rates downward....
So the Bank of Canada follows the Fed and keeps raising rates with the hope that it will cool off pricing in those overheated markets and bring down overall debt loads, meanwhile the rest of Canada also pays a heavy price with far less need for the cooling effect.
BoC doesn't care about the housing market.
If BoC sees that inflation is above target, they will adjust rates upward. If they see inflation is below target, they will adjust rates downward. Everything else is incidental.
What is the relationship between housing prices and CPI inflation? Housing, which includes different kinds of shelter-related costs, makes up 30% of measurement in the consumer price index (CPI), which directly affects how inflation is measured by the Bank of Canada (BoC).
A heated housing market can be a component of inflation. That's doesn't affect their goal of reducing inflation though. I just don't think this is an accurate statement: Controlling inflation is...
A heated housing market can be a component of inflation. That's doesn't affect their goal of reducing inflation though. I just don't think this is an accurate statement:
keeps raising rates with the hope that it will cool off pricing in those overheated markets
Controlling inflation is the only goal here, and they only have one lever to pull. Energy costs could soar independent of housing and they'd still be doing the same thing, with the same goal.
This is relatively unsurprising given the CPI reading yesterday. Hopefully the statement about two more rate hikes in the offing is contingent upon the situation as our develops and not a foregone decision.
It feels like the fed is telling us "No rate increase, but don't you dare get excited about it."
Not very happy about that. What's a bit frustrating is that here in Canada. there are TWO housing markets that are extremely heated - Toronto and Vancouver. The rest of the country has some warm spots, but starter homes aren't going for a million dollars in Regina, Saskatchewan (where you can still buy small old single family homes for 50k). So the Bank of Canada follows the Fed and keeps raising rates with the hope that it will cool off pricing in those overheated markets and bring down overall debt loads, meanwhile the rest of Canada also pays a heavy price with far less need for the cooling effect.
It's getting pricey out there. But inflation SHOULD be dropping - we've certainly been watching our bottom line after multiple interest rate raises.
BoC doesn't care about the housing market.
If BoC sees that inflation is above target, they will adjust rates upward. If they see inflation is below target, they will adjust rates downward. Everything else is incidental.
A heated housing market can be a component of inflation. That's doesn't affect their goal of reducing inflation though. I just don't think this is an accurate statement:
Controlling inflation is the only goal here, and they only have one lever to pull. Energy costs could soar independent of housing and they'd still be doing the same thing, with the same goal.