The Loonie Hour Bank of Canada Puts Rate Cuts on Hold
Jun 6, 2025
The Bank of Canada holds interest rates steady, sparking debates about economic indicators. Home sales in Vancouver plummet while inventory in the GTA surges, highlighting the housing market's unpredictability. A lighthearted discussion on quirky snacks adds flavor to the serious economic talk. The hosts tackle the struggles of the working class and the need for robust wealth creation to support a sustainable welfare state. They also explore trade deficits and the complexities of energy exports, offering insights into Canada's economic dynamics.
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Bank of Canada's Data-Dependent Approach
- Bank of Canada plans to be data dependent and less forward looking due to economic uncertainty.
- Canada's trade concentration with the US limits diversification opportunities.
Carbon Tax Impact on Inflation
- The carbon tax contributed to recent inflation easing, according to the Bank of Canada.
- Central banks may be reaching limits controlling inflation via rate changes due to supply-side factors.
Rate Cuts Don't Guarantee Relief
- Rate cuts may not fully stimulate the housing market due to rising longer-term bond yields.
- Mortgage rates often rise after Bank of Canada rate cuts, complicating relief efforts.