The Bank of Canada is unlikely to hike interest rates again at its Governing Council meeting next Wednesday. Even with the risk of NAFTA’s demise fading and core inflation picking up, there is now a good chance that faltering economic growth and growing signs of a slump in the housing market will keep the Bank on the side lines for some time. Indeed, we expect the Bank’s next move will be to cut interest rates by 25bp to 1.00% late this year, whereas the markets are still pricing in another 25bp rate hike.
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