Bank of Canada preview: 50-bps rate hike a "done deal," economists say - Mortgage Rates & Mortgage Broker News in Canada

Abstract

Markets fully expect the Bank of Canada to deliver its second half-point rate hike in as many months at its upcoming rate decision meeting on Wednesday. In June, the Bank hiked its overnight target rate by 50 basis points, bringing it to 1.00%, citing an "Increasing risk" that expectations of high inflation could become "Entrenched." With headline inflation reaching a 31-year high of 6.8% in April, and core inflation at a 32-year high of 4.23%, the Bank of Canada is widely expected to continue its aggressive pace of rate hikes in the coming months. "We are confronted with an economy that is showing clear signs of overheating, very tight labour markets and this perfect inflationary storm of global events and preference shifts," Bank of Canada deputy governor Toni Gravelle said in a speech earlier this month. "Simply put, with demand running ahead of the economy's capacity, we need higher interest rates to cool domestic inflation." Here's a collection of comments and forecasts released recently concerning the BoC's upcoming rate decision: On what to expect: On the potential for a hike above 50 bps On additional rate hikes after this week: On the impact on Canada's housing market On the potential for rate cuts in the years ahead: The latest rate forecasts The following are the latest interest rate and bond yield forecasts from the Big 6 banks, with any changes from their previous forecasts in parenthesis.