Economic analysts expect the Bank of Canada to announce a significant interest rate increase today in an attempt to ease inflation and provide some relief to the soaring housing market.
Economist and Western University expert Mike Moffatt is available to comment. He believes that the Bank of Canada will also signal that there will be more increases in the near future.
“We can expect the Bank of Canada to raise the target for the overnight rate 50 basis points, from 0.5 per cent to 1 per cent,” says Moffatt, assistant professor at Western’s Ivey School of Business.
Moffatt is an assistant professor in the Business, Economics and Public Policy group at Ivey and is the Senior Director, Policy and Innovation at the Smart Prosperity Institute.
Previously Moffatt was the Chief Innovation Fellow for the Government of Canada, advising Deputy Ministers on innovation policy and emerging trends.
“These hikes should slow consumer spending, cooling off the economy, and easing inflationary pressures. While this will cause home price growth to slow, or even reverse, it will make affordability challenges even more acute, as any lowering of home prices will be more than offset by increased interest payments,” Moffatt says.
Commentary reflects the perspective and scholarly interest of Western faculty members and is not an articulation of official university policy on issues being addressed.
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