BoC expected to deliver eighth consecutive rate hike, but it’s probably the last one
Economists don’t believe the Bank of Canada is ready to hit the brakes on its interest rate-hiking cycle just yet, even as signs grow that inflation is easing and the economy is softening.
Canada’s central bank is expected to announce its eighth consecutive rate increase on Wednesday, with most commercial banks forecasting a raise of a quarter-percentage point. That would bring the central bank’s key interest rate to 4.5 per cent, the highest it’s been since 2007.
Although headline inflation slowed noticeably last month, Royce Mendes, Desjardins managing director and head of macro strategy, said the labour market is still hot and underlying inflation pressures are still “sticky.”
“I think (the bank will) use all of that to justify the further rate increase,” Mendes said.