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Recent strength of GDP and employment data irrelevant amid existential tariff threat Even if tariffs soon lifted, Bank could cut by more than markets are pricing in this year If tariffs are sustained, Bank could eventually return interest rates to …
6th March 2025
Recent upside surprises to activity and core inflation could justify a pause However, with tariffs hanging over the economy, Bank will opt for a 25bp cut Bank set to call time on QT this year The recent pick-up in GDP growth and core inflation pressures …
22nd January 2025
GDP growth has disappointed, but outlook is brighter Core inflation has surprised to the upside of Bank’s forecasts Still a case for another 50bp move, but Governing Council likely to favour 25 bp Although the recent GDP data disappointed, there are green …
4th December 2024
GDP growth and inflation have surprised to the downside of Bank’s forecasts That should persuade the Bank to enact a larger 50bp cut next week We expect another 50bp cut in December to take the policy rate to 3.25% by year-end The Bank of Canada has said …
16th October 2024
Core inflation to come in lower than Bank’s forecast Economic growth remains below potential Bank to cut interest rates by 25bp at each meeting until 2.50% The dovish communication following the last meeting and the encouraging July CPI report leave …
28th August 2024
Totality of the data supports another cut Downside risks to activity rising, upside risks to inflation falling Bank to cut interest rates by 25bp at each meeting until 2.50% Despite stronger core price pressures in May and June, the totality of the data …
17th July 2024
Pieces almost in place for the Bank of Canada to cut But economic and labour market resilience means Bank can wait to be 100% sure Rates to be cut by 25 bp at each meeting from July, faster than markets pricing in The rapid easing in core inflation …
29th May 2024
Clearer downward trend in underlying inflation But stronger GDP growth reduces the urgency to loosen policy New immigration policy could prompt big forecast changes While the recent inflation data have strengthened the case for interest rate cuts, we …
3rd April 2024
Underlying inflation pressures ease in January But signs of stronger economy reduces risk of maintaining restrictive policy We expect the Bank to cut interest rates in June The Bank will be relieved to see the broad-based easing in core inflation in …
28th February 2024
CPI-trim and CPI-median are overstating inflation pressures Economy going from bad to worse Bank to start cutting interest rates in April The acceleration in the CPI-trim and CPI-median measures of core inflation in December suggests the Bank of Canada …
17th January 2024
Economic growth and inflation both weaker than Bank expected Bank likely to tone down, or even drop, its tightening bias Policy rate to be cut by much more than markets expect in 2024 The second consecutive month of muted core inflation pressures in …
29th November 2023
Recession risks rising and inflation falling again Bank to remain on hold but stress too soon to declare victory Bank’s latest analysis implies QT could continue until as late as 2026 The business surveys point to rising recession risks and core inflation …
18th October 2023
Higher gasoline prices mean CPI will surprise to the upside of the Bank’s forecasts But GDP growth is slowing and labour market conditions are loosening Bank can afford to wait for more data and is unlikely to hike again Inflation has surprised to the …
30th August 2023
Economy and housing market enjoying renewed momentum Core inflation pressures easing but still too strong for comfort Loosening labour market means Bank unlikely to raise rates above 5.0% Note: We’ll be discussing the Canadian economic and policy outlook …
5th July 2023
Inflation and GDP growth have surprised to the upside since April meeting Housing turnaround an upside risk to inflation and inflation expectations Progress on US debt ceiling deal means little reason to wait until July before hiking As GDP growth and CPI …
31st May 2023
Inflation has fallen faster than Bank expected Probably too soon for Bank to drop its bias toward further rate hikes New neutral policy rate estimate could move long-run rate expectations The recent banking turmoil in the US means the Bank of Canada may …
5th April 2023
Encouraging signs in January CPI and economy has slowed sooner than expected But labour market still tight and wage pressures too strong Risk of higher interest rates elsewhere also keeps pressure on the Bank The fall in CPI inflation in January and …
1st March 2023
Economic growth slowing and inflation falling But labour market still tight and inflation expectations too high Bank to drop down to 25 bp hike, but likely to add hawkish guidance The Bank of Canada is set to raise interest rates by a smaller 25 bp …
18th January 2023
Higher interest rates weighing on domestic demand Core inflation pressures eased in October Bank to drop down to 25 bp hike as it balances risks of over- and under-tightening The easing of the three-month annualised measures of core inflation in October …
30th November 2022
Improvement in headline CPI inflation not matched by core Consumers’ near-term inflation expectations continue to rise Not enough evidence yet for the Bank to slow the pace of its tightening Governor Tiff Macklem has told us that the Bank of Canada …
19th October 2022
GDP growth and inflation lower than the Bank expected But core inflationary pressures still point to 75 bp hike Bank unlikely to give much away about policy beyond September GDP growth and inflation will be lower than the Bank of Canada …
1st September 2022
Construction activity strong despite weak home sales Home sales fell further below the pre-pandemic norm in July and pre-construction sales seem to have fallen through the floor, but there is no evidence yet that this is weighing on construction. It was …
17th August 2022
Housing woes not yet weighing on construction The further decline in home sales in June and the record monthly fall in house prices did little to affect construction activity, with housing starts once again outperforming expectations last month. As there …
19th July 2022
Jump in inflation expectations points to larger 75 bp hike Bank to reiterate need for policy rate to move to a restrictive setting We expect rate to peak at 3.0% in October and now anticipate rate cuts in 2023 The recent acceleration in wage growth and …
6th July 2022
Further upside surprise in core inflation points to another 50bp hike Housing slump begins, but won’t stop march back to neutral We expect slower pace of tightening in H2, with policy rate peaking at 2.5% We expect the Bank of Canada to hike its policy …
25th May 2022
GDP growth and inflation continue to outperform Bank’s forecasts Bank set to accompany 50 bp hike with start of quantitative tightening We now expect the policy rate to reach 2.0% by the fourth quarter We now anticipate that the Bank of Canada will raise …
6th April 2022
Bank sent heavy hint that March rate hike was likely Set to accompany 25 bp hike with start of quantitative tightening With inflationary pressures broadening, Bank to follow with another hike in April We expect the Bank of Canada to kick off its …
23rd February 2022
Inflation was lower than Bank expected in Q4 and Q1 GDP growth is set to be weak Bank nevertheless set to turn more hawkish amid signs of surge in wage growth ahead Bank to use policy statement to tee up rate hike at the next meeting in March Amid growing …
19th January 2022
Economy a bit stronger than expected but BC floods and Omicron are downside risks Bank to keep forward guidance on policy rate unchanged despite rising wage growth We do not expect the Bank to significantly alter its monetary framework later this month …
1st December 2021
Strong employment gains should be enough for Bank to call time on QE Labour shortages suggest Bank is overestimating the degree of economic slack But with wage growth low, unlikely to bring forward plans for rate hikes We expect the Bank of Canada to call …
21st October 2021
GDP unexpectedly contracted in second quarter, and probably again in July. Bank to wait until October at the earliest to taper again. Guidance on policy rates set to be unchanged. The unexpected contraction in second-quarter GDP means the Bank of Canada …
1st September 2021
Economy has developed as expected, so Bank likely to announce further taper Bank to keep signalling interest rates on hold until at least second half of 2022 New measures of labour market slack may shed light on reaction function As it is widely …
7th July 2021
Recent economic weakness should be offset by stronger third quarter Tone of policy statement likely to be similar to April Bank may signal further reduction in asset purchases likely at the July meeting Inflation surpassed the upper limit of the Bank of …
2nd June 2021
Economy outperforming the Bank’s January forecasts Bank to slow pace of asset purchases GDP forecasts to be revised higher, but timing of first interest rate hike still in 2023 The Bank of Canada is set to cut the pace of its asset purchases next week. …
14th April 2021
Economy has outperformed the Bank’s forecasts But output still far from potential and Bank emphasising need for inclusive recovery Bank to push back against expectations it will raise rates in 2022 Although the economy has been stronger than expected, we …
3rd March 2021
Speculation that Bank could cut interest rates looks overdone. Bank set to upgrade its GDP forecasts. Macklem faces communications challenge as Bank attempts to keep yields low. The Bank of Canada is set to upgrade its growth forecasts next week, despite …
13th January 2021
Bank was already assuming sizeable economic hit from new waves of the virus. So unlikely to loosen policy amid recent restrictions, despite hints it could do more. Vaccine news and new fiscal plan present upside risks to Bank’s longer-term forecasts. The …
2nd December 2020
Bank to emphasise downside risks to the outlook. Policy rate to remain near-zero until “inflation target is sustainable achieved”. Balance sheet expansion set to resume next year. The economy has recovered faster than the Bank of Canada expected, but …
21st October 2020
