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Steady Economic Strength Could Forecast Further Bank of Canada Rate Hikes

Oct 10 2018
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According to observers, Canada’s constant trend of economic strength could justify further hikes in the Bank of Canada’s (BoC) interest rates.

As quoted by Bloomberg, Bank of Montreal chief economist Doug Porter noted that the prevailing set of economic data “reinforces the likelihood of an October BoC rate hike, and keeps a firm foundation on further moves in 2019.”

Economists polled by the publication are predicting the annualized Q3 growth to sit at 2.1%, following the second quarter’s 2.9% pace. Meanwhile, national growth is expected to be at 2.4% during the final quarter of the year.

Statistics Canada numbers indicated that the national labour market saw 63,300 new jobs last month, on top of what is the strongest quarter for employment gains so far this year. Joblessness shrunk a bit from 6% in August to 5.9% in September, reaching a near 4-decade low.

Royal Bank of Canada senior economist Josh Nye stated, “We expect a hike at the Bank of Canada’s meeting later this month, with a decent (and more balanced) growth backdrop arguing for less monetary policy accommodation.”

However, Nye added that such a move might be the BoC’s last for 2018.

 

Source Credit: E. Vecina – mortgagebrokernews.ca

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