In our current economy, with a very strong labor market and inflation far above our goal, I believe a risk-management approach requires a strong focus on taming inflation. Inflation poses both a near- and long-term threat.
After slowing sharply beginning in 2017, the Toronto area market appears to be stabilizing, while resales and prices continue to fall in the Vancouver area. Prices in both areas remain 40 to 60 per cent higher than they were four years ago, suggesting that housing imbalances remain an important macrofinancial vulnerability.