Bank of Canada Governor Mark Carney used a press conference in Toronto to once again warn of the risk posed by Canada’s rising household debt levels. Specifically, Carney warned that the cost to carry debt will increase significantly as interest rates rise over the next few years.
“Household debt in Canada is now at a record high, is now higher than it is in the United States,” Carney said. “At a minimum for us at the bank we have to think about what the implications of this are for how the economy performs if there is an adjustment to housing prices. Because then the wealth is less…and what’s the impact of that on consumption in Canada.”
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