24 June 2011

Among the main reasons of a potential Canadian economic slowdown Carney named the U.S. weak economic data and a too strong Canadian dollar.  Currently it’s trading to $1.02US.
Carney also said the bank may not need to raise rates to a “neutral” level when the economy normalizes. He noted this time the neutral rate, which wasn’t specified, might be a bit lower than before the global financial crisis.
In his interview Mark Carney has raised the topic of possible overheating in the Canadian real estate market. The deal is that in some cities, like Vancouver, the house prices were up. Higher short-term rates may change this situation, but the Governor doesn’t think it should be done this way.