The unlikely event of a U.S. debt default could lead to double-digit U.S. inflation, unemployment and GDP losses, and interest rates rising "into perpetuity," Treasury Secretary Yellen warned this week.

In essence, an "economic catastrophe."

That not-so-pleasant thought is why American lawmakers almost certainly won't let it happen. Although, that didn't stop Yellen from cautioning members of Congress—who like to use debt ceiling votes as bargaining chips for partisan agendas—to "not wait until the last minute" to act. Similar brinksmanship in 2011 led to Standard & Poor's downgrading the U.S. credit rating for the first time in history.

A theoretical jolt to Canada's mortgage market

We've received questions from readers on what a U.S. debt default could mean for Canada's mortgage industry. While consequences are impossible to predict with confidence, one can speculate on at least half a dozen possibilities:

Today's report...

Hana Bank: Low rates. Useful niches

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This & That

Hana Bank isn't exactly a household name, despite its 42-year history in Canada. But it's a name worth knowing—assuming you're a broker who likes competitive uninsured pricing and flexible underwriting.

Hana is a profitable mid-size Korean bank with $452 billion in global assets. It’s been in Canada's broker channel for 15 years and is well-capitalized. Much of its funding comes from the mothership back home.

For high-volume brokers with varied client types, Hana’s specialties can get deals closed for unique or rate-sensitive files. Here's what you need to know.

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1-on-1 with Stephen Poloz: Part I

This is one interview that students of interest rates should not miss.

This & That

Here's a man who knows inflation and interest rates, like no one else.

If you want to understand when the Bank of Canada might ease monetary policy, former BoC Governor Stephen Poloz is one of only a handful of people who's truly in a position of authority on the topic. He's a student of behavioural psychology and he uses that understanding to anticipate Canada's economic path.

We were lucky enough to spend an hour with him last week (but could've listened to him for 8 hours). What follows is part I of our chat, which covers:

• Whether mortgagors should form an opinion on BoC policy
• Why real interest rates matter
• The BoC's information advantage
• Which forecasters are most inaccurate
• How much weight he puts on bond market indicators
• What would take inflation to new highs
• Why borrowers need rate "insurance"
• When inflation expectations might come down
• How long it could take for inflation and rates to drop materially
• How much faith we should put in the BoC's forward guidance.

Below is that interview and the transcript:

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Reverse lenders battle for one-year customers

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This & That

Today's report...

•  The latest from RateLand
•  CMHC boosts multi-family insurance premiums

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This & That

• Wide gap: New condos in Toronto are being sold for roughly $300 more per square foot than resale units, says Jamie Johnston, owner of RE/MAX Condos Plus. "I tell investors, you should never buy a gap of more than $50 a square foot," he says. "Once your new condo gets registered, you’re in the resale market. You haven’t made any money until the resale market rises to the price you paid…That's what we tell our investors…That’s why we're selling so much in Calgary right now. The gap there is much cheaper, and net migration is strong."