Rising interest rates to come?
Posted on June 20, 2008
Filed Under Business, Politics |
reportonbusiness.com: Carney defends decision on rates
Bank of Canada Governor Mark Carney says surprising the markets with a rate freeze last week was not “ideal” but was the right thing to do given that inflation risks are on the rise.
Picking Mark Carney as successor to David Dodge is probably one of the few good things Jim has done as Minister of Finance. He sure has not helped help the situation for Carney by cutting the GST, raising income taxes then cutting them back to the previous levels, and of late done nothing about sustainable growth once the oil patch dries up or prices fall to $50/barrel.
Core inflation is does not indicate a need for a rate hike, rather it is why the a cut was expected. The impact of higher transport and food costs will take time to diffuse throughout the marketplace but likely not to a level that will cause rates to rise. Should the core rate jump, then rates will surely follow.
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