Quote:
Originally Posted by McG
sorry, what?
Prime is 6.25%. increasing prime to 7 to 8 % makes no historical nor factual sense given either what we have today nor what we is expected in the next few years.
The BoC's goals are for "soft" adjustments, not economy jarring 1.75% increases in the next 5 to 17 months.
It isn't knowing more than the BoC, it's based upon what the BoC has already indicated in line with economic expectations. you may also have noticed that we will be having an election within the next few years; the electorate tends to re-elect when they are fiscally happy. Inflation is guiding the BoC's actions, assisted by Ministry of Finance recommendations in Ottawa.
I think there will be alot of workplace pain with a significant increase like this. If you have to increase prices to cover higher interest rates, you either lay off people or raise prices. Across the economy, one move can be deflationary, the other can be inflationary. The BoC has indicated that neither is desirable.
oh yah. and to quote the late Joe Sports, "it's my opinion, not yours".
Or do you have a different understanding of Economics? I'd be interested to hear your take on why you know more than the BoC.
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First off, I never said I know more than the Bank of Canada, so not sure where you are getting that from????
Obviously increasing rates will affect the inflation rate one way or the other as you have stated. I am no economist and all I am saying is that I am sure there have been many economists that work for th Bank of Canada that have made a judgment call on increasing the rates and predict that it will reduce inflation. In calgary and Alberta it most certainly will.