Mortgage holders won’t find much to fret about in today’s statement from the Bank of Canada.
Carney & co. said that, “Over time, some modest withdrawal of monetary policy stimulus will likely be required.” That’s vaguer than prior projections but still a signal that the next rate move should be up.
Here’s more from the Bank’s statement this morning:
- “Core inflation has been lower than expected in recent months…”
- “Total CPI inflation has fallen noticeably below the 2 per cent target…and is projected to return to target by the end of 2013, somewhat later than previously anticipated.”
- “Housing activity is expected to decline from historically high levels, while the household debt burden is expected to rise further before stabilizing by the end of the projection horizon.”
- “The timing and degree of any such withdrawal (in rate stimulus) will be weighed carefully against global and domestic developments, including the evolution of imbalances in the household sector.”
That last line is new. The Bank’s recent statements haven’t suggested such a close link between household debt and rate increases. But it’s an implied warning that does little to convince anyone that rate hikes are looming.
The next BoC rate meeting is December 4, 2012.
Rob McLister, CMT