We expect the Bank of Canada to retain its tightening bias in next week's policy statement. With the euro-zone taking a temporary step back from the brink and US consumers spending more freely, the Bank's warning that its policy rate will eventually need to be hiked from the current 1.0% is still just about defensible. A hint of higher rates in the future also helps to divert criticism that the Bank isn't doing enough to dampen the boom in household debt, which now looks eerily similar to the run-up in the US during its housing bubble.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services