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Carney predicts that rates will have to rise – safe bet – but when? #yeg #yegre

In an interview with CTV television from London, Bank of Canada Governor Mark Carney said Canada’s housing market has begun to ease and the growth of household debt is slowing, in part due to recent actions by the federal government and the country’s banking regulator. Policy makers are prepared to take further measures to stem increases in debt if needed, according to Carney.

“We’re watching obviously this very closely and if additional steps are required, including by the bank, we will take them,” he told CTV.

Carney also said the Canadian dollar has become a safe haven for investors and the country needs to veer the incoming capital to productive uses rather than housing.

The Bank of Canada wants to see the currency reflect the country’s economic fundamentals, and “those fundamentals are strong relative to the rest of the world but there is also an element right now of a safe haven premium for the Canadian dollar,” Carney said in the CTV interview.

“So our challenge as a country is how do we use that capital that comes in,” he said. “We can use it to grow our economy, invest it in new productive assets and industries, or we can build houses. Our view is we should do the former.”

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