Bank of Canada Cuts Bond Purchases for 3rd Time, Bank of New Zealand Stops QE Cold-Turkey, Citing Housing Bubble in “Least Regrets Policy,” Following a Slew of other Central Banks | Wolf Street

The statement said that in addition to “near-term spikes in headline CPI inflation,” driven by “one-off” or “temporary” events, it expects “more persistent consumer price inflation pressure” to build over time “due to rising domestic capacity pressures and growing labour shortages.”

The magnificent housing bubble is now showing up explicitly in the statement as reason for ending QE: “The Committee agreed [with the government] that the recent rate of growth in house prices remains unsustainable.”

And “any future increases in mortgage rates will further dampen house price growth,” it said. So those higher mortgage rates are coming.

Bank of Canada Cuts Bond Purchases for 3rd Time, Bank of New Zealand Stops QE Cold-Turkey, Citing Housing Bubble in “Least Regrets Policy,” Following a Slew of other Central Banks | Wolf Street