Last Wednesday, Bank of Canada senior management announces yet another rate hike.
Apparently, the Bank of Canada is willing to do anything to get inflation back to 2%.
But at what cost?
This increase hurts and we are not immune to another increase in the coming weeks.
Let’s be honest, the consequences are devastating.
For example, if you have a $400,000 mortgage with a variable rate over 25 years, it will cost $1600 per month in January 2022. Now it’s $2800.
A different remedy
We must seriously ask whether raising the key rate is the only way to reduce inflation.
Because right now we are heading for the wall. Most Canadians are struggling to make ends meet.
By raising the key rate like this, mortgages go up and that doesn’t help inflation. Worse, it adds fuel to the fire.
In Canada, we have a strong banking system. This has enabled us to overcome crises without too many problems.
But we reserve the right to question the correctness of our banking policy.
Apparently, the Bank of Canada fell asleep. Officials have kept prices low for a long time. Now they are playing catch-up hockey.
Besides, we don’t think Justin Trudeau is concerned about the financial situation of Canadians.
Politicians can put measures in place to help reduce inflation, such as finding innovative solutions to combat labor shortages.
Unfortunately, our elected officials do not seem to have taken the situation to its full potential.
Let’s just hope it doesn’t take House reruns for them to finally respond.