{"id":25287,"date":"2017-09-06T14:19:43","date_gmt":"2017-09-06T19:19:43","guid":{"rendered":"http:\/\/olduvai.ca\/?p=25287"},"modified":"2017-09-06T14:19:43","modified_gmt":"2017-09-06T19:19:43","slug":"bank-of-canada-raises-interest-rates-again","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=25287","title":{"rendered":"Bank of Canada Raises Interest Rates\u2026 Again"},"content":{"rendered":"

Bank of Canada Raises Interest Rates\u2026 Again<\/a><\/h3>\n
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\"stephen-poloz1-300x225\"<\/a><\/span>For the second time in less than two months, the Bank of Canada has raised interest rates.<\/a><\/span><\/p>\n

On Wednesday, the central bank raised its overnight lending rate by a quarter per cent to 1 per cent.<\/span><\/p>\n

The move surprised many who weren\u2019t expecting a rate increase until later this Autumn.<\/span><\/p>\n

Just like last time,\u00a0<\/a>the rationale behind higher rates was centred around the Bank of Canada\u2019s belief that the economy is growing faster than expected.<\/span><\/p>\n

Bank of Canada Governor Stephen Poloz said, \u201cThe level of GDP growth is now higher than the bank expected.\u201d<\/span><\/p>\n

Of course, this assumes that\u00a0GDP measures anything.<\/a><\/span><\/p>\n

The Canadian loonie surged after the announcement, climbing to 82 cents U.S. <\/span><\/p>\n

The decision reinforces the message that easy money and low-interest rates are coming to an end. Of course, the bursting of Canada\u2019s real estate bubble could reverse direction for the bank, using these recent rate gains as leverage to cut rates in order to \u201cstimulate\u201d the deflating economy.<\/span><\/p>\n

But until then, analysts are expecting more rate hikes since many have confused consumer indebtedness and rising prices as economic strength.<\/span><\/p>\n

The Bank of Canada won\u2019t confirm these predictions since, according to the central bank\u2019s statement, price controls on interest rates are, \u201cpredetermined and will be guided by incoming economic data and financial market developments.\u201d<\/span><\/p>\n

Of course, the Bank of Canada isn\u2019t clueless when it comes to higher rates and indebted Canadian households. In the rate hike statement, the bank promised that \u201cclose attention will be paid to the sensitivity of the economy to higher interest rates,\u201d given \u201celevated household indebtedness.\u201d<\/span><\/p>\n

The bank\u2019s next scheduled rate-setting is Oct. 25.<\/span><\/p>\n

All in all, today\u2019s announcement puts interest rates back to where they were in January 2015, before Poloz made two surprising \u201cemergency rate cuts\u201d to deal with falling oil prices.<\/span><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Bank of Canada Raises Interest Rates\u2026 Again For the second time in less than two months, the Bank of Canada has raised interest rates. On Wednesday, the central bank raised its overnight lending rate by a quarter per cent to 1 per cent. The move surprised many who weren\u2019t expecting a rate increase until later […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[942,7340,4896,353,430,2446,7617,534],"class_list":["post-25287","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-canada","tag-boc","tag-easy-money","tag-gdp","tag-interest-rate","tag-loonie","tag-mises-institute","tag-monetary-policy"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/25287","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=25287"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/25287\/revisions"}],"predecessor-version":[{"id":25288,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/25287\/revisions\/25288"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=25287"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=25287"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=25287"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}