The Bank of Canada will raise interest rates again this year, most likely at the April policy meeting. In contrast to the consensus, we don’t see a series of further rate hikes beyond this. NAFTA’s potential demise cannot be ruled out. Meanwhile, the housing slowdown that began more than a year ago appears to be morphing into a full-blown correction. Accordingly, we still believe that any further hikes will ultimately prove ill-timed and have to be reversed before year-end.
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