cross-posted from: https://lemmy.ca/post/73057753
The Bank of Canada raised its key interest rate for the first time since July 2023 Wednesday to tamp down inflation, a hike Ontario Premier Doug Ford panned as “a massive mistake.”
“Higher rates won’t get oil moving through the Strait of Hormuz or lower tariffs on Canadian businesses. They will only make life more expensive for Canadian families and workers, punishing them for something they can’t control,” Ford wrote in a tweet before the announcement was made this morning.
That’s literally how inflation works. In this case, it is a direct result of US foreign policy. “Taking out” the cause of the inflation, and then saying “without this, inflation would be where it should be”, is really kind of weird. Like, of course it would…but that’s not what’s happening.
The Bank of Canada is trying to compensate for all that…they aren’t responsible for causing it. And if things keep going the way they have been, with Iran and the tariffs, then they may have to raise rates again. Or, would you rather the inflation just keep picking up speed, until no amount of rate hikes can stop it?
What part of my comment gave you the impression I was against this rate increase?
Here, let me help. I don’t care what reason the BoC uses to do so, the rates should be a lot higher than they are right now.
I don’t know, man…your whole comment sounded like you were complaining about the rate hike.
By… using the same phrasing the BoC governor used in his press conference?
No one’s expecting anyone but Trump and Iran to control the supply side issues. He explicitly said he did it to reduce the likelihood that businesses pass those issues on.
Did the BoC governor also say “the only tool the BoC has is a hammer”? Because that would be an odd criticism coming from the guy in charge of the BoC.
And, yeah…the whole point in raising interest rates right now, is to slow borrowing, until energy costs have stabilized again. You don’t want the current cost of oil to impact borrowing, only to have it come down again in a year, and have people holding more debt than it’s worth.
This is simply an unfortunate economic fact.
No, that was me. And it was a fact, not a criticism. The only thing the BoC can do is tweak the interest rate. You want more than that, that’s gonna have to come from the other BoC governor. You know, the one we elected.