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September Bank of Canada Interest Rate Hike
September Bank of Canada Interest Rate Hike
With today’s 75 basis point rate hike, the Bank of Canada fulfilled market expectations by shifting its policy rate above the 3% threshold into restrictive territory. If the Bank was previously watering down the punch, today they finally removed the punch bowl from the raging inflation “party”.
With today’s 75 basis point rate hike, the Bank of Canada fulfilled market expectations by shifting its policy rate above the 3% threshold into restrictive territory. If the Bank was previously watering down the punch, today they finally removed the punch bowl from the raging inflation “party”.
Headline consumer inflation has peaked, thanks to falling oil prices, but core and services prices are still rising, as are wages in a tight labour market. GDP growth will slow in the second half of 2022, but with inflation likely to exceed 7% for the year, there’s a long way to go before inflation falls back near the Bank’s 2% target
Expect another hike in October, of 25 or even 50 bps.
Stephen Tapp, Chief Economist, Canadian Chamber of Commerce