The Financial Post reports in its Tuesday edition that no one said the Bank of Canada's shift to data dependency would be easy.
The Post's Kevin Carmichael writes that BOC watchers, so confident in their near-term outlooks a month ago, turned tentative as November turned into December. A slew of recent events and releases, including the acute weakness of Canadian crude, have rattled the consensus that interest rates will be higher by January, if not as soon as Wednesday. Citibank's Dana Peterson advised her clients on Nov. 23 to get set for an interest-rate increase at the BOC's first policy announcement of 2019, scheduled for Jan. 9. Ms. Peterson sounded much less certain a week later, when Statistics Canada reported that a drop in business investment had slowed economic growth in the third quarter.
"We expect that hikes will continue, with the next in January, although with potential risk that a hike is delayed," she warned in a note published last week. The Post says the outlook remains unsettled. It says there is momentum, but the question is whether the economy is cruising, chugging or decelerating.
The BOC is counting on exports and business investment to drive economic growth.
Both wobbled this summer.
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