While officials have said in recent months that they intend to get the policy rate to a “neutral” level of between 2 per cent and 3 per cent relatively quickly, they now say there’s a growing chance they will need to move the rate to 3 per cent or above
Bank of Canada governor Tiff Macklem said the central bank may need to raise its benchmark interest rate to 3 per cent or above to bring inflation under control, and that the bank’s governing council is open to larger rate hikes if needed.
The bank’s governing council has raised interest rates three times since March, in an aggressive push to cool down Canada’s overheating economy and prevent people from losing faith in the bank’s inflation target. This has included two 50 basis point moves – the first half-point rate increases since 2000 – bringing the policy rate to 1.5 per cent.
Pushing borrowing costs higher will be a “delicate” task, Mr. Macklem acknowledged. Canadian households are heavily indebted and home prices have become severely stretched over the past two years.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Higher inflation, global tensions complicating financial system risks: Bank of CanadaHigher interest rates, inflation, geopolitical tensions and high household indebtedness pose risks to Canada\u0027s financial system. Read more.
Read more »
Bank of Canada says household debt and home prices key risks for financial systemThe Bank of Canada said vulnerabilities from high household debt and elevated housing prices have increased and pose key risks to the Canadian financial system.
Read more »
Bank of Canada to outline financial system risks amid soaring inflation - National | Globalnews.caThe Bank of Canada's annual financial system review comes as decades-high inflation rates are straining deeply indebted households after a run-up in the real estate market.
Read more »
Bank of Canada sounds alarm on economic risk of high household debt amid soaring inflationWith interest rates set to keep rising, the Bank of Canada is sounding the alarm on the risk record high house prices and an increasing number of households with high mortgage debt could have on the Canadian economy.
Read more »
Bank of Canada says high household debt levels, elevated home prices pose top risks for economyCanada’s central bank says household vulnerabilities have worsened over the past year and could result in stress in the country’s financial system
Read more »
Typical mortgage payment could be 30% higher in 5 years, Bank of Canada warns | CBC NewsInflated house prices and high household debt levels are a major vulnerability to Canada's economy, the Bank of Canada warned in a report assessing the strength of the country's financial system on Thursday.
Read more »