Why our housing spending worries Bank Of Canada

Toronto Star

MAYERS:     Canadians can expect to enjoy cheap borrowing costs for a while yet and the Bank of Canada doesn't seem to be in any hurry to change things.  That's good news for those investing in stocks and for those who want to buy a home.  It's far less so for savers, heading in their sixth lean year as we remain stuck in an awkward low interest rate trap.  On Wednesday in his latest monetary review, Bank of Canada governor Stephen Poloz kept the overnight lending rate, the rate the big banks are charged to borrow money, unchanged at 1 per cent.  That's where it's been for five years.  TD Economics referred to the news as "a do nothing interest rate announcement."  That's true, but lest anyone think the situation is normal, this stretch of uninterrupted interest-rate calm was last seen in the 1950's.  Dwight Eisenhower was in the White House and John Diefenbaker was about to become prime minister.  It's anything but normal.

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