Bank of Canada resumes rate hikes
|Summary
Bank of Canada policymakers surprised at today's monetary policy announcement, lifting the policy interest rate 25 bps to 4.75% at today's meeting. The statement contained some hawkish signals, particularly around policymaker concerns that CPI inflation could get stuck above the 2% target and that the economy remain in excess demand. As a result, we have adjusted our Bank of Canada forecast and now believe another 25 bps rate hike to 5.00% will be delivered in July. In addition, we believe monetary easing will start later, and believe Bank of Canada policymakers will now look to initiate rate cuts starting in Q2-2024.
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