The Bank of Canada implied in its policy statement this morning that, despite growing concerns around trade, it still believes further interest rate increases will be needed later this year. That said, in its decision to keep rates at 1.25%, there were hints that the Bank has become more cautious, not just on the trade outlook but also due to the uncertain impact of tighter regulation and past interest rate hikes on housing. We previously thought the Bank would raise rates again in April, before reversing course later this year, but it now looks like 1.25% could mark the peak in rates.
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