BoC: INTEREST RATE HIKES COULD BE BIGGER, SOONER THANKS TO INFLATION

Mar 25, 2022

By Bob Komsic

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Look for the Bank of Canada to raise it’s key interest rate by half-a-percent in mid-April.
That hint from the central bank’s deputy governor.
Sharon Kozicki told the U.S. Federal Reserve Bank of San Francisco’s monetary policy conference that Canada’s central bank was ”prepared to act forcefully” to get inflation under control.
The argument being Canadian households are better prepared to manage rising interest rates than they were in 2017-18.
”I expect the pace and magnitude of interest rate increases and the start of [quantitative tightening] to be active parts of our deliberations at our next decision,” said Kozicki.
”The reasons are straightforward:  inflation is Canada is too high, labour markets are tight and there is considerable momentum in demand.”
Earlier this month Bank of Canada Governor Tiff Macklem said the bank is not ruling out a 0.5% hike instead of the usual 0.25% — which has not happened since May 2000.
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