02/09/2023
“If new data are broadly in line with our forecast and inflation comes down as predicted, then we won’t need to raise rates further.”
Bank of Canada Releases Deliberation Summary
for First Time
In response to call for improved transparency from the International Monetary Fund, the Bank of Canada released for the first time a summary of its deliberations from the last meeting on interest rates resulting in the January 25th quarter-point increase.
The summary makes note of the Bank’s assessment on the housing market: “there was concern that the effects of tighter monetary policy could be larger than expected. This could arise if the decline in house prices were to accelerate. At the same time, Governing Council recognized that continued strong immigration and household formation would provide underlying support for the housing market. Expectations of future monetary policy easing could also spur buyers to re-enter the market.”
This is the first time that this has been done by our central bank, but is normal practice internationally.
Yesterday, when addressing the bank’s approach moving forward when speaking to financial analysts at the CFA Quebec, governor Tiff Macklem said “If new data are broadly in line with our forecast and inflation comes down as predicted, then we won’t need to raise rates further.” And, when speaking to Bloomberg News, addressing the impact of rate hikes on Canadian households and businesses, as well as the outlook for the real estate market he said that they needed more time to assess before making any new moves, adding that the real estate market would likely further soften before stabilizing later in the year.
