I’m not very versed in economics, but I’ll like to think such move should come as a last fall back option to tackle what’s happening. What I see happening here is the Canadian govt using their ‘wining’ card when the game is not even over. I mean, COVID is not even over, what will happen if the situation worsens? What will they do then? Won’t there be repercussions for fumbling with the interest rates?
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That is why the rate hike is watched by many with interest. The bank is not in a nice spot. They either have to keep the rate low and watch the housing market go crazy with unprecedented rate of inflation or increase the rate now so that they can induce some stability to the flailing economy. Let's see.