David Dodge spoke with BNN Bloomberg about housing and labour markets in Canada, as well as the prospects for inflation and interest rates.
He says the Bank of Canada can get inflation back to its target level—with continued elevated interest rates through 2024 and into 2025. The disinflation process is ongoing but slow and will get "sticky" as it moves down from three percent to two percent.
Most importantly, David says we will soon begin the second quarter of this 21st century and it, "is going to be a period when naturally, interest rates are going to be higher because we will not have the degree of excess supply that we experienced for all the period from the 2008 Great Financial Crisis right through to the beginning of COVID. We are going to be in a period where there's going to be a degree of excess demand in the world coming from lower savings as the baby boomers age, number one and number two, coming from increased investment as we try to deal with climate change and technological change."
Bennett Jones