The Consequences of Ignoring Economic Signals: The Bank of Canada's Misstep

David Rosenberg (founder of independent research firm Rosenberg Research & Associates Inc.) criticizes the Bank of Canada's recent unexpected interest rate hike, suggesting that it has overlooked recessionary signals in key economic sectors. These include manufacturing, residential construction, real estate, financial services, retail, and wholesale, which have shown contractions or stagnation over the past year. Despite the Bank's impression of robust consumer spending, the retail sector has been experiencing decline. The decision to raise rates seems misguided, given the most credit-sensitive area, residential construction, is on a five-month downward trend. Rosenberg expresses concern that the Bank is ignoring these facts to pursue its two-percent inflation target. More details: https://financialpost.com/news/economy/bank-of-canada-may-regret-latest-interest-rate-hike