Home > interest rates, macro economics > David Rosenberg on BOC’s rate announcement & Canadian Housing Market

David Rosenberg on BOC’s rate announcement & Canadian Housing Market

In Today’s Breakfast with Dave:  

The market is split on tomorrow’s Bank of Canada meeting, but most economists like round numbers and feel another hike, to 1%, is in order. We feel, based on how the economy and inflation have been moving vis-à-vis the Bank’s latest forecasts, not to mention the heightened uncertainty south of the border, that there is not enough rationale for another tightening. But monetary policy is as much an art as it is a science and perhaps Mr. Carney will take the opportunity to take out one last insurance hike.

And on housing… needless to say he is bearish

Consider that from the nearby peaks, right when the Bank of Canada embarked in its rate-hiking cycle, we have seen…    

  1. Existing home sales decline 36%;
  2. Single-family housing starts plunge 29% ;
  3. Residential building permits slide 15% ;
  4. Home prices drop 5%.  

You don’t have to do much more than study what happened to the U.S. economy three years ago to understand that the housing sector… leads. 

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