Article Source: Real Estate News Exchange
The Bank of Canada is attempting to convince people it’s serious about decreasing inflation, which reached 6.9 per cent last month – the highest rate in 31 years.
CIBC managing director and deputy chief economist Benjamin Tal told an audience at the June 7 Land & Development conference at the Metro Toronto Convention Centre, however, that rising interest rates should be at least as big a concern.
The Bank of Canada increased its policy interest rate by half a percentage point on June 1 to 1.5 per cent as part of its effort to get the inflation rate back to its two per cent target. “Two years from now, inflation will be two per cent,” said Tal. “It’s not about inflation. It’s about the cost of bringing inflation back to two per cent in terms of high interest rates.”