“The Bank of Canada softened its stand on raising interest rates , a shift that reflects an economic outlook that has deteriorated markedly since the spring.
Canada’s central bank also left its benchmark interest rate at an ultra-low setting of 1 per cent for the 25th consecutive month, and left its economic outlook for the next few years largely unchanged.”
– from ‘Bank of Canada softens rate stand, flags debt concerns’, Kevin Carmichael, G&M, 23 Oct 2012
“The Bank of Canada strengthened its bias for raising interest rates, retaining its outlier status among the Group of Seven nations while signaling concern about record household debts it says will keep growing.
Policy makers led by Governor Mark Carney kept the benchmark rate at 1 percent, where it’s been more than two years, and said “some modest withdrawal of monetary policy stimulus will likely be required.”
– from ‘Carney Strengthens Bias to Raise Rates as Debt Risk Grows’, Greg Quinn, Bloomberg, 23 Oct 2012
The speculative mania in Vancouver RE will resolve itself regardless of whether rates stay low, or whether they strengthen slightly. Either way, there is too much debt, and the market is collapsing under its own weight.
Fortunately, our predictions are not dependent on trying to read the BOC’s intentions.