My subscription
My Subscription All Publications

Bank hikes rates by 50bp again and hints at even more

The Bank of Canada hiked its policy rate by another 50bp, to 1.5%, today and, after warning that "the risk of elevated inflation becoming entrenched has risen", closed the accompanying statement with an ominous hint that a 75bp hike was now on the table for the next policy meeting in mid-July.
Paul Ashworth Chief North America Economist
Continue reading

More from Canada

Canada Economics Update

Will Canadians retire themselves into a recession?

The sharp increase in retirements this year presents downside risks to our forecasts for employment and, with GDP growth already faltering, further raises the probability that economic activity will contract.

9 August 2022

Canada Economics Weekly

Stagflation summer

The further falls in home sales and employment in July add to the evidence that the economy is losing momentum. With no sign of a material easing of inflationary pressures, however, it is too soon to expect the Bank of Canada to pivot.

5 August 2022

Canada Data Response

Labour Force Survey (July)

The second consecutive monthly fall in employment will raise a few eyebrows at the Bank of Canada but, as retirements were partly to blame, the unemployment rate remained at a record low and wage growth is strong, we doubt it will prevent a further 100 bp of policy rate hikes over the Bank’s next two meetings.

5 August 2022

More from Paul Ashworth

US Economics Update

Monetary Indicators Monitor (Apr.)

Annual money growth is slowing sharply and, given rapidly rising interest rates, wealth losses and QT, that slowdown has a lot further to run. The growth rate of bank loans is accelerating, however, suggesting that fears of an economic downturn are overblown. US Payrolls Drop-In (3rd June, 10:00 ET/15:00 BST): Our US Economics team will be online shortly after the release of the May employment data to discuss the labour market, inflation and the Fed. Register now.

31 May 2022

Canada Data Response

GDP (Q1)

First-quarter GDP growth slowed to 3.1% annualised, from 6.6%, as the Omicron-related restrictions had more of an impact than previously thought. But the 0.7% m/m increase in monthly GDP in March illustrates that the economy had a lot of momentum going into the second quarter.

31 May 2022

Canada Economics Weekly

Bank to continue with 50bp rate hikes

With core inflation rising well above the ceiling of the 1% to 3% target range and first-quarter GDP growth likely to have been as strong as 5.0% annualised, there is little to stop the Bank of Canada from hiking its policy rate by another 50bp this week, to 1.50%.

27 May 2022
↑ Back to top