Interest Rates? What is happening?
Ever heard of Stagflation? You should as it has been happening globally for a while and finally Canada has caught the virus. Stagflation happens when inflation goes up at the same time as economic growth goes down. Stagflation is a very dicey thing for central bankers to handle and rookie governor Carney has his hands full. What do you do? Increase interest rates to control inflation, that in Canada is expected to reach 3% by the year end, and further hurt economic growth or decrease rates to stimulate growth and have prices and currencies skyrocket? Well when you don’t know what to do you wait and see, which is exactly what the Bank of Canada will do.We will not see ANY rate increase for the balance of the year while the bank gathers more data and tries to figure out a plan that will work in the difficult domestic economy that also is plagued with severe regionalism.Couple this with the continued decline of housing activity and buyers will continue to be well positioned to take advantage of buying a home right now.
