'Really dangerous': BoC walks tightrope as inflation pressure builds
BNN Bloomberg
Consumer price pressures are going to get worse before they get better – and households may be facing higher borrowing costs sooner rather than later.
Consumer price pressures are going to get worse before they get better – and households may be facing higher borrowing costs sooner rather than later.
That’s the Bank of Canada’s latest take on soaring inflation and the future path of interest rates -- outlined Wednesday in its Monetary Policy Report.
In updating its economic outlook, the central bank is tipping its hat to what the market and Bay Street economists have been warning for weeks now: inflation is proving stickier than thought and higher borrowing costs are closer than you think.
The Bank of Canada is putting the “middle quarters of 2022” in play for conditions to be met for a possible rate hike; that timeframe spans April through September.
That’s a considerable shift from its previous language suggesting the second half of next year. And it fits better with the street’s call.
Just last week, Scotiabank economist Derek Holt told BNN Bloomberg he expects eight rate hikes from the Bank of Canada before the end of 2023, with the first coming in July. And bets are increasing in the market that a hike could come as early as April.
