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Originally Posted by Slava
Well the issue is that things change. I don't know what date that article has on it, but was there a war in Ukraine? Could they have known that inflation was going to spike at that time, or is this all just "easy to see" because we know the outcome?
So, things changed and the central banks (around the world, I'll note) had to change their strategy as a result. Even if you want to hammer them for saying things like this or calling inflation transitory, I'm not sure we would be in a good position if they basically said "well, we said that we'd keep rates low, so we're sticking at 0.25% and we'll just let people get wrecked by infaltion". How would that be at all a responsible tactic?
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Things change. Exactly. Which is why the BoC shouldn't have been actively encouraging people to take on risky loans.
I'm far from an expert in economics and it seemed painfully obvious to me, as soon as the COVID lockdowns hit and the government responded by printing money, that inflation was almost certainly going to be an issue in the somewhat near future.
The BoC should have just kept quiet about their long term strategy, as it was painfully clear we were headed into a period of uncertainty. That alone could have factored into people's decision for fixed vs variable.