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Originally Posted by pseudoreality
I disagree. That is not a good analogy. Nelson's intent is for Milhouse to be hit and he has no other considerations. Raising the overnight target rate has the side effect of raising variable rate mortgages, but that's not why they are doing it or even factoring into the decision much. Also, the majority of mortgages are fixed anyway. The Bank of Canada isn't sitting around a table debating on whether they should raise people's mortgages.
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The Bank of Canada is trying to reduce aggregate economic demand. There are three types of borrowers.
Individuals, corporations, and the government. The first two groups are (in aggregate) each much larger borrowers than the government. And the government isn't likely to spend less on consumption due to interest rate hikes - it'll just increase borrowing so its demand is mostly unaffected in the medium term.
Corporations also have slower feedback to the economy than individuals for lots of reasons. Longer term projects (ie, once you start building a new factory/mine/data centre you mostly finish it) with annual budgets being the big one. Corporations also make capital spending decisions mostly based on their weighted average cost of capital, with a relatively high mix of equity to debt compared to households, so are on average less sensitive to debt costs.
Individuals are the most sensitive to interest rates, with new and existing mortgages/LOCs and new car loans being the primary mechanism. The BoC would probably prefer the pain (aka reduction in consumption demand) be spread around more evenly, but they wouldn't exclude mortgages from the rate hikes even if that was possible.
So while they aren't as mean-spirited as Nelson, I think the analogy is a reasonable one. The BoC knows full well raising their rate raises mortgage rates, it's one of the main feedback loops they're counting on to reduce demand to fight inflation.