Carney Strengthens Rate-Increase Bias on Debt Concern: Economy

The Bank of Canada signaled it may seek to curb record household debt levels by raising interest rates for the first time in more than two years, sharpening the divide with other Group of Seven nations focused on easing policy to combat a cooling global economy.

Governor Mark Carney said in Ottawa today that “some modest withdrawal of monetary policy stimulus will likely be required,” even as it kept the benchmark rate at 1 percent, and that “imbalances in the household sector” will influence the timing of any move. Strategists such as Jimmy Jean at Desjardins Capital Markets in Montreal predicted the central bank would drop or weaken its tightening bias.