Bank Of Canada Dismisses Data Showing Homes Are Overvalued, But Uses It For Rates
Inflation is transitory… or it may not be. It depends on whether the data is considered reliable enough that day. Bank of Canada (BoC) released a home price exuberance model, showing the market bubbles. Even more interesting is a footnote for the model they used. They feel inflation data on rent is unreliable, because it shows chronic overvaluation. So they dismissed it, despite it being used as a key data point supporting low interest rates. The data is bad when it shows overvaluation, but good when it supports higher home price growth. Oh boy. Let’s dive in.
Original Article Source Credits: Better Dwelling , https://betterdwelling.com/
Article Written By: Stephen Punwasi
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