It is almost a foregone conclusion that the Bank of Canada will hold its policy interest rate at 1% next week. More importantly, we think the Bank will not offer any hint of imminent rate hikes, while possibly placing even more emphasis on renewed aversion to risk in global financial markets. We still see the Bank holding its policy rate at 1% for the rest of this year. Should it decide to raise rates as markets expect, however, it is unlikely to raise rates much more than once or twice before the economy exhibits clearer signs of struggling. As such, any proposed policy tightening campaign is likely to be short-lived, if not regretted.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services