The Bank of Canada's job isn't done—judging from the hike and a half now priced into the #OIS# market this year.

Markets see what the BoC sees: stubborn perkiness in labour, services and housing markets, with core inflation plateauing.

The Bank of Canada knows rates are restrictive but worries they're not restrictive enough. Real rates are still low compared to pre-#GFC# rate cycles. And if the late 1970s (chart above) taught central banks anything, it's that they can afford only so much patience with lagging monetary effects—before running the risk of inflation expectations re-igniting. A dangerous scenario like that could drag out this hiking cycle far longer than necessary.

Where are these lagged effects?

Multiple online brokers have launched in-house lenders in recent years. But this one's different.

This one is Rocket Mortgage Canada, sister company to Rocket Mortgage, the largest retail lender in the United States, with $133 billion (USD) in originations last year.

Rocket Canada's shiny new lender launches on Monday, and it's got the brand and backing to make an impact in Canada's mortgage space. To learn how much of an impact, MLN spoke with Hash Aboulhosn, Co-Founder & President of Windsor, Ontario-based Rocket Mortgage Canada.

Should consumers be excited—and competitors worried? Here's what he told us...

• BoC meeting odds: The #OIS# market now implies a 33% chance of a BoC rate hike on June 7. Another 25 bps increase is almost fully priced for September 6. The market sees the first cut now in spring 2024, but that's eons away in bond time. If incoming data—especially unemployment—start coming in weaker, which is a high probability, cut timing would be pulled forward once again.

CIBC officially stopped selling mortgages through brokers in 2012. But, while few know about it, the bank has been back in the broker channel for some time now.

Washington's political establishment is nearing a resolution on the debt ceiling fiasco. With a bit of last-minute horse-trading, Congress should be able to lift the debt limit by the Treasury Department's revised June 5 deadline.

That should hopefully remove some upward pressure on U.S. yields, which have combined with CPI concerns to take Canadian fixed rates higher.

"The bulk of the recent back-up in Treasury yields has been in real yields, not in the implied inflation premium," BMO said Friday. Translated into English, this suggests that U.S. debt and spending concerns have been significant rate drivers as of late.

"Do you really want to make a big bet that you do know what's going on right now?"—Stephen Poloz on mortgage term selection

In this much-anticipated follow-up with our prior BoC Governor, Stephen Poloz, he saves the best for last. Students of monetary policy, mortgage strategy and housing dynamics should find it well worth the 30 minutes.

Among the topics Mr. Poloz covers:

• The substantial weight the BoC puts on the U.S. outlook when setting policy
• How, and how often, the BoC and Fed communicate
• What could cause U.S. and Canadian rates to deviate
• What's behind our extraordinary labour market, which has defied rate hikes
• Why Canadian job growth has been "net disinflationary" for the last year
• Why today's unemployment is artificially low
• The non-difference between rent and interest
• How co-ownership could disrupt the housing market
• Real estate as a top inflation hedge
• Political pressure on the BoC
• The government's nuclear option for controlling the BoC
• Which mortgage term he'd pick today
• Why there could be a shift to longer mortgage terms.

Below is that interview and the transcript:

Anecdotes from our megabanks lend a sense for what's happening throughout the prime mortgage market. That's why we pour through their quarterlies (every quarter).

Among the general trends they reported in the second quarter: