Quote:
Originally Posted by Jason14h
Potentially, but their actions on raising rates faster and by full half points aren't suggesting that
The risk is the longer inflation goes on, that higher rates need to keep going.
Almost better to shock the system and stop it (In theory) and then start slowly lowering rates again
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Possibly, but real-world inflation hasn't made sense economically for quite some time now throughout the Western world. It should've been much higher than it was for most of the past two decades according to basic macroeconomics, and yet it... just wasn't. I think the government will be betting heavily on that peculiar feature of modern economies to return.
Also - our banks. Canada's true masters.
I should add that I think these interest rate hikes of a full half point ARE the shocks. That's it, that's all they've got. Maybe a few more, but there will be a point where the risks are too great.