Archives for March 2013

Interest rates are going nowhere fast

Greg Klump, CREA 13/03/2013   Interest rates are going nowhere fast Canadian interest rates will remain stuck at their current unusually low levels throughout 2013. I’ve been saying as much since early 2012 and feel more than a little vindicated by the Bank of Canada’s policy interest rate announcement on January 23rd, 2013, when it said interest rate hikes are “less imminent than previously anticipated.” The Bank of Canada acknowledges that Canadian economic growth slowed more abruptly in the second half of 2012 than it had previously anticipated. It also recognizes softer than expected inflation, a moderating housing sector, and a marked slowdown in growth for household debt. In setting interest rates, the Bank’s goal is to hold consumer price inflation at a target rate of two per cent (plus or minus one per cent). To achieve that goal, it raises interest rates to slow the economy and quell inflation (and lowers them to fuel economic growth and prevent inflation … [Read more...]