Economists expect the Bank of Canada to hold rates through the rest of the year
Markets are not fully sold on that calm.
After the July 15 decision, Capital Economics North America economist Thomas Ryan said the bank’s messaging “suggests it has no intention of responding to energy-driven inflation with higher interest rates,” adding that “money markets continue to price in some chance of tightening.”
The council left that door ajar, warning in the summary that “if oil prices increased and were to stay higher, spillovers to other prices could increase, raising the risk that inflation would broaden.”
Such a move, it added, “would likely require a monetary policy response.”
That tension traces back to gasoline.
