Saturday, October 25th6.6°C
23711
23129

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




Recent Trending




Today's Market
S&P TSX14543.82+56.99
S&P CDNX805.45-3.15
DJIA16805.41127.51
Nasdaq4483.715+30.923
S&P 5001964.58+13.76
CDN Dollar0.8901-0.0003
Gold1231.20+2.10
Oil81.02-0.73
Lumber336.40+6.80
Natural Gas3.631+0.009

 
Okanagan Companies
Pacific Safety0.105-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.15-0.02
Cantex0.07+0.015
Anavex Life Sciences0.194-0.004
Metalex Ventures0.045+0.005
Russel Metals33.39+0.23
Copper Mountain Mining2.03-0.05
Colorado Resources0.145+0.005
ReliaBrand Inc0.012-0.001
Sunrise Resources Ltd0.05-0.01
Mission Ready Services0.445+0.035

 



23825

FEATURED Property
19602996873 - Lakeside Drive
3 bedrooms 3 baths
$749,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


What I learned in China

Photo: ContributedI will never be an expert on China. It is just too big, too complex and too old with layers of history and meaning that would take several lifetimes to unravel. As I said to my hosts...


We can get on together

I was in LA this week. I witnessed such crazy and unusual circumstances as I strolled along Hollywood Blvd and Sunset Blvd. A far cry from sleepy Peachland in the Okanagan! The strange thing was, I f...


Weakening global growth worries

The Big Picture Growth worries persist Worries about weakening global growth and its potential impact on the US economic recovery roiled markets around the globe this week. Europe continues to be the ...

_








Member of BC Press Council


23741