News Analysis
With the Canadian economy in decent shape, the housing market is perking up again. August’s sharp drop in interest rates will entice even more demand, though it’s coming at a time when the economic expansion could be ending, and if so, that would be problematic.The red flag is that long-term interest rates have fallen below short-term interest rates—known as an inverted yield curve. This typically happens when investors start to worry about an economic slowdown and people become less confident in the future. It’s also a warning sign that a recession might be around the corner.
