Bank of Canada will hike 100bps over 12 months: David Dodge
BNN Bloomberg
A former head of the Bank of Canada said he expects inflation will gradually come down from multi-decade highs and expects to see the central bank’s main policy rate rise by a full percentage point at minimum.
A former head of the Bank of Canada said he expects inflation will gradually come down from multi-decade highs and expects to see the central bank’s main policy rate rise by a full percentage point at minimum.
“I don't know (what the bank will do Wednesday), but what I do know is that over the next period, over the next year, those rates are probably going to go up at least 100 basis points,” David Dodge said on Tuesday.
As of Wednesday morning, Bloomberg data indicated investors see a 75 per cent probability that the central bank will raise its main policy rate by a quarter point on Wednesday to 0.5 per cent. That would be the first increase since 2018, and would happen after Statistics Canada’s most recent consumer price index showed inflation surged 4.8 per cent year-over-year in December, which was the fastest rate since September of 1991.
Dodge said he expects the annualized inflation will “come down considerably” to around 2.5 or 2.75 per cent by the end of this year.
More to come.
