The Globe and Mail reports in its Friday edition that a Reuters poll of primary dealers shows they believe the Bank of Canada is
done raising interest rates
this year. A Reuters dispatch to The Globe reports that the BOC, however, is expected to chart a more aggressive
tightening path for 2018.
The median forecast among 10
of Canada's 11 primary dealers
that deal directly with the BOC at debt auctions is for
the BOC to wait until the
first quarter of next year to hike
again. That will give it time to see how its two
back-to-back rate hikes are
absorbed by the economy as well
as indebted consumers.
There is a risk the bank could
increase rates for a third time in
2017 if economic data continues
to be strong, forecasters say.
Four primary dealers
expect the BOC to raise
again in the fourth quarter. BMO expects the next move to be
in the first quarter of 2018. Respondents put the median
probability of the bank hiking at
its next meeting in October at 30
per cent, matching
market odds of 35 per cent.
The BOC's overnight
rate is now seen rising to
1.75 per cent by the end of 2018, 25 basis points higher than
economists had expected by that
time in a wider Reuters poll
done last week.
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