Job losses push October Bank of Canada hike odds down to 25%
He added that “higher energy prices will begin feeding other categories of inflation this fall, and could force officials to tighten policy soon.”
Thomas Ryan, senior North America economist at Capital Economics Ltd., said in a note to the Financial Post that the Bank of Canada is on course to raise its policy rate soon to the midpoint of its neutral range, as a guard against “upside inflation risks from energy and food prices.”
The neutral range runs from 2.25 percent to 3.25 percent, placing the midpoint at 2.75 percent, and Capital Economics expects the bank to stop there.
Garnet Anderson, head of portfolio management at Tacita Capital, told BNN Bloomberg that “we were going to be surprised if they actually went forth with a hike, now it would be super surprising if they went forth with a hike in October, it doesn’t make sense.”
Reuters reported traders still pricing a 25-basis-point increase at the December meeting, and five Bay Street economists surveyed by Canadian Mortgage Professional expect the Bank to hold its policy rate steady on October 28.
