The Bank of Canada Rate Statement is expected tomorrow, December 8th, 2021. The rate currently sits at 0.25% and the expectation is that it will stay the same. A growing group of economists is calling for a rate hike and they're expecting it to happen soon. So when exactly will it happen?
The Bank of Canada is expected to raise its interest rate by the third quarter of next year. This is based on the idea that inflation is less transitory than expected and also considering the Omicron variant, which has tainted all the recovery attempts across the world.
In a Reuters poll, 26 of 27 economists expect at least one kike by the end of Q3 in 2022. This is a much stronger stance than the previous poll held in October. All 29 economists are in agreement that there will be no rate hike tomorrow.
“The Bank of Canada will raise rates in the third quarter of 2022…the elevated rate of inflation is putting pressure on the Bank of Canada and the Fed, but there is a hesitance to raise rates and risk stunting the recovery,” said Brendan LaCerda, senior economist at Moody’s Analytics.
“As such, early 2022 is the critical juncture. If all goes to plan and inflation cools, then the pressure to act dissipates. If not, then we would expect the timeline for rate increases to shift forward significantly.”
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