BoC's Lane: Rates are still quite low relative to what we think of as neutral level

Timothy Lane, Deputy Governor of the Bank of Canada, is responding to questions, with key headlines (via Reuters) found below:

  • Each decision is a live decision
  • What we were seeing over the summer and two weeks ago, data were looking quite favorable for Canadian economy
  • GDP from q2 suggested growth was rather strong; that's what data dependence looks like
  • Where we are now, rates are still quite low relative to what we think of as neutral level
  • Households are way more indebted than they were a few years ago; we have to watch all these changes, along with c$
  • As c$ is strengthening, we're watching closely and will be taking that into account strongly
  • Household debt is an issue that's been continuing to play out, it's really linked to strength of housing markets
  • Consumer indebtedness is a big vulnerability for Canada's financial system, hopeful this will moderate over time

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