Canada's Housing Frenzy Is Bad News for Central Banks Everywhere

The transcript discusses the belief that major central banks are nearing the end of their inflation control efforts. The Bank of Canada paused its rate hikes, leading to a surge in housing prices. This pause was interpreted as a potential precursor to rate cuts, causing a buying frenzy in cities like Toronto and Vancouver. The unexpected rise in housing prices prompted the Bank of Canada to resume rate hikes. The transcript highlights Canada's housing affordability crisis, exacerbated by a lack of new housing supply. This issue is not unique to Canada, as other developed countries face similar challenges. The transcript concludes by noting that rising home prices despite increasing rates suggest that rates may not be rising quickly enough.

What does the term 'can of worms' refer to in the context of stopping interest rate hikes?

Discuss the relationship between interest rates and housing prices as mentioned in the text.