With the latest inflation data showing no signs of a substantial cool-down, economists are forecasting the Bank of Canada will continue its reign of aggressive rate hikes, and some predict a 'technical recession' during the first half of 2023.
With the latest inflation data showing no signs of a substantial cool-down, economists are forecasting the Bank of Canada will continue its reign of aggressive rate hikes, and some predict a "technical recession" during the first half of 2023.that the consumer price index is up 6.9 per cent year-over-year in September, despite economists previously anticipating a mere 6.7 per cent increase.
“You’ve got the pretty horrible situation in Europe. Obviously, China is going through a very significant slowdown — perhaps so significant that they decided yesterday not to publish economic data for a little while. And we got the U.S. where things are slowing and the Feds indicated that they want to raise interest rates quite a bit more and that will lead to a recession there.”
“You can think of it as the economy kind of taking a breather for a few quarters,” he said. “The Bank of Canada is trying to engineer a cooling of the economy. It’s trying to slow inflation. So this slowdown that’s occurring is consistent with that, and hopefully helpful from an inflation management perspective as we look to inflation over the next year and a half.”
“We expect the bank is getting closer to a pause on rate hikes, once it reaches four per cent by the end of the year,” Preston said.Derek Holt, a vice-president and head of capital markets economics at Scotiabank, anticipates the Bank of Canada to increase its policy rate by another 75 points next week, as he said in a note to investors Wednesday. He also mentioned that he had been supporting a 75 basis-point hike before the release of CPI figures.
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Canada recession may be 'necessary evil' as central bank queues big hikeEven as recession worries intensify in Canada, the central bank is likely to go ahead with another supersized interest rate hike next week after data showed underlying inflation was stubbornly persistent despite aggressive tightening, analysts said.
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Odds of a 75-bps hike from the Bank of Canada just went up, economists sayCanada inflation numbers will give the Bank of Canada no reason to change its hawkish stance, economists said. Read on
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