Canada Markets close in 3 hrs 9 mins

Bank Of Canada Expected To Outline Path Towards Interest Rate Hikes In 2022

·1 min read

The Bank of Canada is expected to outline a path towards interest rate increases in the New Year when it holds its latest policy meeting later today (December 8).

Economists forecast that the central bank will keep its benchmark overnight interest rate at its current level of 0.25% following today’s meeting but is expected to begin preparing markets for a series of aggressive rate hikes throughout 2022 aimed at reining in inflation.

The Bank of Canada has already ended a bond-buying stimulus program and hinted at an accelerated timeline for beginning to increase borrowing costs in the coming months. A strong run of economic data since its last policy decision in October has only reaffirmed views that interest rate increase are coming.

Inflation in Canada has hit a two-decade high, and no longer appears to be transitory. Employment has surpassed pre-pandemic levels, with the jobless rate at near five-decade lows. Employers across Canada are struggling to fill positions, and wage pressures are mounting.

Read:

Some analysts now forecast that the Bank of Canada will begin raising interest rates as soon as next month (January 2022). Markets are pricing in five rate increases next year, with more than half of economists polled by Refinitiv Data forecasting the first rate hike in January.

Pressure is mounting on the Bank of Canada to act. Inflation in Canada is running hot with seven monthly readings above the central bank’s 1% to 3% target range.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting