(Bloomberg) -- The Bank of Canada says households can weather higher borrowing costs, but flagged rising asset valuations and financial stress among renters ...
-- The Bank of Canada says households can weather higher borrowing costs, but flagged rising asset valuations and financial stress among renters as risks to the outlook.Arm Slides as Tepid Outlook Fuels Concerns Over AI Slowdown
The lack of widespread financial stress gives policymakers room to focus their attention on inflation as they weigh when to start lowering borrowing costs. There’s less urgency for immediate or deep interest rate cuts if Canadian households can handle a higher-for-longer interest rate environment, especially amid reduced recession risks.
Officials said small and medium-sized banks are most exposed to risks around commercial real estate at around 20% of loans, but noted those risks aren’t concentrated in a single area of the financial system. Hedge funds and pension funds have also “significantly” raised their leverage in repo markets, up 75% and 14% respectively in the last year, the bank said.
Underlying price pressures eased in the first three months of the year, but the central bank has said it wants to see further progress on disinflation before cutting rates. April’s CPI data, scheduled for release on May 21, will be an important determining factor for the governing council’s decision.Stock market today: Wall Street is heading for another quiet, mixed day
Bank Of Canada Carolyn Rogers Canadian Households Rate Mortgages Asset Valuations Interest Rates
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