RE:RE:RE:RE:RE:REITs smell BoC Rate HikeWith Canada's GDP forecast being negative for the rest of the year, it means that the economy isn't driving inflation (ie: people aren't overearning and overspending, otherwise GDP would be higher).
Plus, the biggest culprit behind increased wages is the various government levels increasing minimum wage, which ripples through the other workers. Since the increase is policy driven by the government, pressure on the economy through increased rates won't yield results on the wages themselves but will impact inflation through higher cheaper imports but lower costlier exportations. With the GDP already forecast to be negative, this would increase the negative GDP readings and thus push the economy faster and longer into a recession.
The economic conditions now are vastly different than they were in the 70s and the 80s. To assume that the same simplistic solutions would be the same is naive imo. All readings on the global economy are pretty grim, and demand is strongly down. Unfortunately, a general lack of competition on the market has left many business with pricing power despite demand lowering, which was not the case back in the 70s and the 80s. There are structural problems and globalization that also affects the inflation on which the BoC can't do much, regardless of their policy. Take the housing market, there is a large deficit of new housing builds vs needs, which drives the prices up. At the same time, the federal government wants to increase immigration to a summit, increasing the demand for housing further, in an already imbalanced market. For this reason, housing costs are not likely to come down through increased rates, despite a worsened economy.