The Bank of Canada's warnings about coming interest rate hikes may already be reaping benefits, including changing the behaviour of consumers, governor Mark Carney says.
The central banker says in a speech about the advantages of signalling future intentions, and its limitations, that his persistent warnings about future interest rate hikes may be influencing the types of mortgages homebuyers are acquiring.
He noted that the share of fixed-rate mortgages has almost doubled to 90 per cent this year, with a corresponding decline in variable-rate mortgages.
The central bank has not deviated from the one-per-cent policy rate since September 2010, but in the past year has warned that its next move, whenever it comes, will most likely result in higher rates.
"Our guidance indicates that some policy action may be necessary, encouraging a degree of prudence in household borrowing," Carney said in the speech to Toronto financial analysts.
"The share of new fixed-rate mortgages has almost doubled to 90 per cent this year, reflecting the combination of attractively priced fixed-rate mortgages and the tightening bias of the Bank of Canada."
Carney's reasoning is that the more transparent a bank is about its future intentions, the more likely players in the economy will act according to expectations.
Read more Business News
- Borba trial to resume next monthPenticton / S. Okanagan - 5:00 am
- Council grabs attentionWest Kelowna - 5:00 am
- Horning making a comeback?Kelowna - 6:27 am
- Sex offender arrested for murderBC
|QHR Technologies Inc||1.24||-0.03|
|Anavex Life Sciences||0.205||-0.0145|
|Copper Mountain Mining||2.40||0.00|
|Sunrise Resources Ltd||0.02||-0.005|
|Mission Ready Services||0.27||-0.02|
“Is this a fair offer from ICBC?”…. “How much should I settle for?”… “What is my claim worth?” These are just some of the questions I regularly get as...
Last night I was privileged to be able to speak at the Greater Westside Board of Trade business awards dinner. Photo: ContributedI talked about Innovation and Collaboration which are two very interes...
There will be a time when you will need to decide who you should appoint as executor of your Will. As well, there may be a time when you will be asked by someone to act as the executor of his or her W...