Are rate hikes over? Market watchers give their forecast to Bank of Canada
Global News
No further interest rate hikes are expected this cycle, according to the balance of respondents to a Bank of Canada market participants survey.
Market watchers are not expecting any further interest rate hikes from the Bank of Canada in the current tightening cycle, according to a survey released Monday.
The Bank of Canada’s third-quarter survey of market participants, which includes senior economists and strategists tracking Canadian financial markets, was conducted between Sept. 20 and 28.
The median forecast from the survey’s 28 respondents showed the Bank of Canada holding its benchmark rate steady at 5.0 per cent until April 2024, at which point the balance of market participants are expecting the first rate cut of 25 basis points.
The policy rate is expected to drop to 4.0 per cent by the end of next year, based on the median responses.
The Bank of Canada has one more interest rate decision left this year on Dec. 6.
After rapidly raising its policy rate by 4.75 percentage points since March 2022, the central bank has held steady in its last two decisions, but policymakers continue to warn that rates might need to rise higher.
The Bank of Canada will provide more insight into what led to its latest rate hold with the release of deliberations for its Oct. 25 rate decision on Wednesday.
The central bank has been tightening monetary policy in an effort to take steam out of the economy and bring inflation back down to its two per cent target.
