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Central banks generally have a mission of keeping money supply growth in line with growth of the economy. They’re not authorized to spend money on a government

Central banks generally have a mission of keeping money supply growth in line with growth of the economy. They’re not authorized to spend money on a government program (for example subsidized affordable housing) or change local laws (loosening zoning). I do agree COVID-19 crisis response zero interest rate policy contributed to bidding up the price of housing even further.

FirmwareBurner 3y ago
>I do agree COVID-19 crisis response zero interest rate policy contributed to bidding up the price of housing even further. Something known beforehand and by deign.
cmrdporcupine 3y ago
> They’re not authorized to spend money on a government program Not sure how you got the idea I was advocating for that. I clearly pointed the finger at prov/fed gov't for that kind of thing, not the BoC. My problem is with holding the rates. It sent the wrong message. Inflation on basic goods remains high, and the housing market has not stabilized. In my opinion, the BoC responded to political pressure, and should not have.
- randomdata 3y ago
  > Inflation on basic goods remains high Not at the source level anymore, though. Things have already crashed hard there. Retail is still working off futures contracts from last year when prices were very high, so it is expected to be still high. Nothing happens overnight. However, that is not indicative of a long-term trend. Deflation is the greater risk in the near future as those older contracts start to expire and vendors start sharpening their pencils on the much lower new contracts. > the housing market has not stabilized It is true that the home ownership market is still falling (now down around 20% from the peak), but that is no doubt a promising indicator in the BoC's eyes. That will eventually relieve the rental market as well. Rents are extra high currently because people are holding off buying a home until the ownership market bottoms out, which has created a situation where more people are looking to rent than usual. > In my opinion, the BoC responded to political pressure CPI is the last leg in a long tour. While it may still look grim, all the leading indicators are telling a different story right now. From my perspective, the BoC responded to what is going on in the economy. Their actions are directed towards managing the future, not the present.

FirmwareBurner 3y ago

>I do agree COVID-19 crisis response zero interest rate policy contributed to bidding up the price of housing even further. Something known beforehand and by deign.

cmrdporcupine 3y ago

> They’re not authorized to spend money on a government program Not sure how you got the idea I was advocating for that. I clearly pointed the finger at prov/fed gov't for that kind of thing, not the BoC. My problem is with holding the rates. It sent the wrong message. Inflation on basic goods remains high, and the housing market has not stabilized. In my opinion, the BoC responded to political pressure, and should not have.

randomdata 3y ago
> Inflation on basic goods remains high Not at the source level anymore, though. Things have already crashed hard there. Retail is still working off futures contracts from last year when prices were very high, so it is expected to be still high. Nothing happens overnight. However, that is not indicative of a long-term trend. Deflation is the greater risk in the near future as those older contracts start to expire and vendors start sharpening their pencils on the much lower new contracts. > the housing market has not stabilized It is true that the home ownership market is still falling (now down around 20% from the peak), but that is no doubt a promising indicator in the BoC's eyes. That will eventually relieve the rental market as well. Rents are extra high currently because people are holding off buying a home until the ownership market bottoms out, which has created a situation where more people are looking to rent than usual. > In my opinion, the BoC responded to political pressure CPI is the last leg in a long tour. While it may still look grim, all the leading indicators are telling a different story right now. From my perspective, the BoC responded to what is going on in the economy. Their actions are directed towards managing the future, not the present.