The Daily Chase: Bracing for big Bank of Canada hike; Rogers damage control
BNN Bloomberg
The Bank of Canada is widely expected to hike its target for the overnight rate three-quarters of a point to 2.25 per cent today.
The stakes are high for an economy that’s already cooling — most specifically in the housing market, where FOMO has subsided. In a comment to clients late yesterday, BMO Senior Economist Robert Kavcic stated “even just an initial nudge in interest rates was enough to crack expectations and trigger a correction. Wednesday’s (likely) 75-basis-point rate hike will TKO any remaining expectations-led froth.”
We’ll have insight throughout the day on what today’s hike means for the economy and your money. And we’ll gather perspective on what the bank’s next move will be. Consider these comments from the last 24 hours or so (in reports to clients), both of which suggest a pause could be coming sooner than later:
“It will take time for higher rates to feed through more noticeably to economic activity and for that cooler demand to eventually feed through to lower inflation. Therefore, the Bank of Canada is in no position to pivot just yet. Instead, expect policymakers to drop some breadcrumbs about the potential for an earlier pause than markets expect.” – Royce Mendes, Desjardins managing director and head of macro strategy
