Some fear Bank of Canada Gov. Tiff Macklem is poised to raise rates again in July in a bid to drive inflation down to its target. ‘It’s two per cent or bust,’ says one economist.

  • Sir_Osis_of_Liver@kbin.social
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    1 year ago

    Unprecedented times? Hardly.

    The annual inflation rate from 1971 to 1991 bounced between roughly 5% and 12%. It was only after BoC adopted the 2% target in the early 1990s that the inflation rate moderated.

    My first car loan was through Chrysler, and 'discounted ’ to 11% from the 13% bank rate. That was for a Dodge Colt 200E. No AC, no cruise control, roll your own windows, no radio, no rear wiper, all for roughly $9500, almost $20K in today’s money.
    Mortgages peaked just over 20% in 1981. My first mortgage was close to 6% in the 1990s.

    The “unprecedented” time was that period from roughly 1993 until prior to the pandemic of very low interest and inflation rates.

    • Kelsenellenelvial@lemmy.ca
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      1 year ago

      That’s fair, but it’s not the whole story. Fact is things were more affordable then, particularly for people in entry-level type jobs making near minimum wage. Look at things like median wage vs median cost of housing, and you see a very different storey, even with high interest rates.