Why it’s too soon to assume inflation and rate hikes are over – By Don Pittis (CBC News) / Sept 6, 2022
Experts are warning against ‘wishful thinking’
After some jumbo-sized interest rate hikes, there are likely a lot of Canadians who would like the Bank of Canada to just quit it already.
Many in the real-estate business, some who want to lend you money or sell you investments, would be pleased if we all agreed that recent central bank rate hikes were a blip and that the world was going back to the rock-bottom interest rates that helped make businesses profitable.
Bargain basement mortgage payments, low car payments and soaring stocks pump money into the economy and spread the wealth. Low rates make house prices rise, make it cheap for businesses to borrow to invest or buy back stock and make existing bonds increase in value.
But as Canadians wait for Wednesday’s Bank of Canada decision on whether or how much to raise interest rates, there are voices advising caution. While there are many who would benefit, at least in the short term, if rates stayed near their recent lows, according to others that’s just wishful thinking.
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