Central Banks

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Central Bankers have a great way of avoiding when they are wrong, what is scary is how quick they jump on when they percieve they are right. This gem from Bank of Canada Senior Deputy Governor Carolyn Wilkins, "we started to raise rates at exactly the right time."

BOC carolyn wilkins

Image : Wilkins - ah huh Told Ya So

It is all a matter of perception of course. Canda relies heavily on exports, particular energy exports. Raising rates sent the $USDCAD rate significantly higher. But in a world of no inflation (at least by central bank measures) Wilkins said "exactly the right time to achieve our inflation target".

So in a country where in some regions such as Toronto where mortgages take a huge proportion of incomes she offers this support:

What we see is that it's more difficult for some borrowers than others to adjust, but the macro outlook will allow for adjustment

Another wonderful case of academia out of touch with mainstreet;

Vast majority of households are not carrying mortgages, they're carrying assets

Earlier BOC Governor Poloz said that it takes six to eight quarters for the full impact of rate hikes to work through an economy, mortgage holders are happy with that. He also said he was NOT surprised by resiliency of Toronto housing market, the demand side is very strong. 

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