Bank of Canada due for ‘oversized’ 50-basis-point interest rate hike: economist
The Bank of Canada is likely to hike its key overnight rate by half a percentage point on Wednesday, the Conference Board of Canada’s chief economist says, as the think tank’s economic forecast predicts home prices could start to drop next year.
Pedro Antunes tells Global News he expects the central bank to double its key overnight rate to one per cent at its announcement on Wednesday with an “oversized” increase of 50 basis points.
He joins the growing chorus of economists and market forecasters who are now widely expecting an interest rate hike of half a percentage point, the first since May 2000.
Back then, the nominal neutral rate — the level of interest that allows full productivity and keeps inflation on target — was around five per cent.
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