Economy 52,861 Posted June 15, 2022 Share Posted June 15, 2022 https://www.bnnbloomberg.ca/boc-likely-to-mirror-0-75-u-s-fed-hike-next-month-economists-1.1779389 Shortly after Jerome Powell announced a 75 basis point increase to US rates (the biggest increase in 28 years) bringing the upper range to 1.75% he announced next meeting another 50 or even 75 basis points is likely bringing US rates to 2% or 2.25% Canada which has 1.5% as rates after its own agressive increases is expected to also rate hikes next meeting by 0.75% as well to bring the rate to 2.25% North America has been the most agressive in the developed world in rasing rates to cool inflation. Because both economies are hot they also have more manuverability to do so than Europe or Japan for example Link to post Share on other sites More sharing options...
PartySick 172,545 Posted June 15, 2022 Share Posted June 15, 2022 What does this mean for us dummies on the bottom? Will a can of beans still cost $3? Whimsical bitch Link to post Share on other sites More sharing options...
pachinko 10,755 Posted June 15, 2022 Share Posted June 15, 2022 Will this cause house prices to come down? Will this cause grocery prices to come down?Will this cause gas prices to come down? Please someone smart explain it. @Economy Link to post Share on other sites More sharing options...
Economy 52,861 Posted June 15, 2022 Author Share Posted June 15, 2022 34 minutes ago, pachinko said: Will this cause house prices to come down? Will this cause grocery prices to come down?Will this cause gas prices to come down? Please someone smart explain it. @Economy Food is a very inelastic good because people need it to survive and it's one of the last things people cut back on. So something like food is unlikely to get significant Inflation relief from any cooling in demand from higher rates Gasoline may get a bit more relief than food if there's a slow down but due to disruptions will probably only go down a little bit not a lot Housing prices quite likely yes. It's one of the sectors of the economy most impacted by changes in interest rates in fact we are already seeing prices falling here in Canada since the rate hikes started Everyday goods and services like restaurants, appliances, entertainment, electronics, personal care products, clothing etc will probably not fall in actual cost in terms of the inflation it already got but the rate of inflation on these things should normalize with the rise in rates. Meaning they won't fall in prices most likely but they should stop going up so quickly as they have been over the last year Link to post Share on other sites More sharing options...
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