Sunday, September 8, 2013

Bank of Canada should hike rates if worried about housing: Scotiabank

Bank of Nova Scotia’s chief executive officer Rick Waugh said the Bank of Canada should raise its rates if the central lender is concerned that housing prices are rising too quickly.
Mr. Waugh stressed that higher rates would be the most effective way to tame housing prices now that regulators have reined in mortgage amortization periods and taken other steps to prevent a property market bubble. Scotiabank’s leader added that he doesn’t see a hard landing for real estate.
I think the problem with this, is raising rates would increase foreign investment in Canada and would cause the dollar to rise.  A rising dollar would hurt the manufacturing sectors and the gross exports.  This is a fine line  the Bank of Canada has to walk and their attempts at changing ammortorization lengths and such things are to slow the housing markets, but leave the interest rates alone.

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