Bank of Canada weighed two paths before raising rates to 2.5%
“A rate hike likely locks us into year-over-year declines in housing activity for the rest of this year and into next, and I don’t see things turning until there’s a rate drop,” Fox previously said.
Jessica Rickerby, president of the Canadian Mortgage Brokers Association of Ontario (CMBA Ontario) in Toronto, challenged the bank’s underlying logic.
“While inflation is a key concern of Ontarians, so is housing affordability. The difference is that affordability is a pressing issue right now, whereas inflation is — at present — a hypothetical,” Rickerby said.
Dr. Sherry Cooper, chief economist at Dominion Lending Centres in Vancouver, said the Bank was drawing an explicit parallel to its pandemic-era policy missteps.
“The communications make it clear that the central bank wants to stay ahead of the curve and ‘avoid the debacle’ of 2022-23, when it was too late to raise the policy rate,” she wrote.
