Canada Economics

Canada Economics

Canada Chart Book

13 September, 2017

Markets bracing for another interest rate hike

The Bank of Canada’s bold call to raise interest rates again so soon after its well-telegraphed July hike caught some investors completely by surprise, resulting in a sharp increase in rate expectations over the next 12 months. (See Chart.) As things stand, the market implied probabilities suggest that there is a near 40% chance of another interest rate hike to 1.25%, from 1.00%, at the October policy rate meeting. Our view is that, at this stage, an October rate hike is slightly more likely tha

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