Sound bytes from the Bank of Canada‘s Mark Carney, from a speech he gave yesterday:
- “The Canadian economy is expected to begin recovering later this year.”
- “…cutting the policy rate by 350 basis points since December 2007…with the usual lag…will have a powerful impact on economic activity and inflation.”
- “Since the easing cycle began in December 2007, we have lowered the overnight rate by 350 basis points. The prime rate has fallen by 325 basis points, Bankers Acceptance rates (key short-term financing instruments for corporations) have fallen by about 380 basis points, and variable rate mortgages by about 185 basis points.”
- “Our focus is clear, our actions consistent, and our objective explicit: 2% CPI inflation.”
- “The Bank has taken into consideration the higher risk premiums demanded in today’s markets in setting its overnight rate. As well, it has taken into account the effect on future Canadian inflation of the lower level of foreign demand that has resulted, in part, from financial difficulties in other countries. The policy rate is lower than it otherwise would be in the absence of these difficulties.” [CMT: As a result, rates may move up quickly once the economy heats up again…whenever that will be]
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Last modified: April 29, 2014
Mr. Carney might want to take a look at what the IMF has to say. I wonder if he really believes what he is saying or if he is just trying to blow sunshine.
So basically low interest rates are going to fix the recession? Sounds like sunshine to me.
I don’t think low interests will fix the recession. Obviously BoC lower the interests doesn’t mean that the Banks will follow. So, new clients won’t get any benefits from that. However, it probably would help prevent the situation to be worse. Chances are, if someone loss their job, they are tight on the money. With the interests lower for their mortgage, at least they have better chance to keep their home rather than force into foreclosure. That’s my view from this and its great for middle income family that probably make up of 80% of Canadians.
The BoC is on drugs if hey believe their own report. This financial crisis is getting worse every day and the banks and politicians are not telling the public the truth. They dont because they fear what will happen if the public knows the truth.I’m not a fear mongerer but if you are joe public then I would make sure your money is well protected — you will thank me before the year is out.
The BoC has to say that – I’m a trustee in Bankruptcy and in the GTA and things are going to get really messy!
All these ridiculous procedures and bureaus Canada has work well in an upmarket but when the market goes down they aren’t flexible. There is a big disaster happening in the Canadian housing market right now