The BoC won't hike to 6-8%. It's all just talk to cool the economy off without actually increasing rates. There was in interesting study issued by the Globe and Mail a few days ago that showed that the Canadian economy has never, ever done well when the BoC moves to increase interest rates ahead of the Fed.
With that said, we're in very new times, where the Canadian economy, thanks to our more highly regulatated banking industry, is much sounder in principal than the American economy. If we continue to follow the Fed's benchmark, we may see an untenable increase in inflation while we await the American economy's full recovery.
I foresee a 4-6% interest rate within the near-to-medium term. That's enough to cool the market off, but shouldn't:
A) Cause anything beyond a minor correction in the housing market
B) Cause our dollar to increase in value much further ahead than the Americans, assuming the expected US rate of 2-3% in the near-to-medium term occurs alongside my predicted rate.
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