By Tom Bradley

I opened the Financial Times website this morning to see that the unemployment rate in the U.S. had dropped to 6.1%. Beside that headline was a story about the Dow Jones hitting 17,000. Just minutes before, I saw in the Globe and Mail that Canada and the U.S. are on pace to exceed last year’s record car sales. And on the weekend, I was reading how the U.S. housing market has found a Goldilocks balance (not too hot, not too cold). Of course, I don’t need to read anything to know that our real estate market has no such balance … it’s just hot.

So tell me again why central bankers in North America feel they have to ‘keep our economy going’ by maintaining a zero-interest rate policy. Is it not clear that their addiction is causing distortions in the real economy and inflating all asset prices? Do they have a backup plan if we go into a slowdown (due to big ticket exhaustion?) while rates are still at current levels? Can’t the U.S. Federal Reserve and Bank of Canada take their foot off the gas just a little and give us some breathing room in case we need a hit of stimulation in less heady times?