Saturday, December 20th0.9°C
24562
22934

Carney says warnings are working

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.

The Canadian Press


Read more Business News

21297


Recent Trending




Today's Market
S&P TSX14468.26+121.51
S&P CDNX676.54+11.04
DJIA17804.8026.65
Nasdaq4765.38+16.983
S&P 5002070.65+9.42
CDN Dollar0.8618+0.0001
Gold1197.20+2.50
Oil56.50+2.39
Lumber336.20-0.70
Natural Gas3.446-0.196

 
Okanagan Companies
Pacific Safety0.12-0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.25-0.03
Cantex0.03-0.005
Anavex Life Sciences0.1726+0.0026
Metalex Ventures0.05-0.005
Russel Metals25.58-0.42
Copper Mountain Mining1.55-0.02
Colorado Resources0.120.00
ReliaBrand Inc0.011-0.0089
Sunrise Resources Ltd0.05-0.005
Mission Ready Services0.215-0.01

 
23744


24153

FEATURED Property
19965551532 Marina Way, Kelowna, British Columbia
4 bedrooms 3 baths
$925,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


My final thoughts on real estate

This will be the last column I write on real estate. Largely because at the end of the year I will be handing in my license. After 20+ years of working in land development, resort development and rea...


Reflecting on the end of the year

The importance of the end of the year and the Christmas holidays is profound. It is a time to reconnect with family and traditions that have made us who we are. But the year-end has always been a time...


Parenthood: Estates, insurance & taxes

It is now even more important to ensure your loved ones are well looked if anything should happen to you. Here are a few topics to consider helping you prepare for some of the unexpected events that c...

_








Member of BC Press Council


22842