Bank of Canada raises rate 75 bps and signals more hikes to come

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Bank of Canada raises rate 75 bps and signals more hikes to come
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ICYMI: Bank of Canada hikes interest rate to 3.25% — via financialpost BoC interestrate inflation ratehike

. “The effects of COVID-19 outbreaks, ongoing supply disruptions and the war in Ukraine continue to dampen growth and boost prices.”Article content

This fifth consecutive hike comes as the Canadian economy’s momentum is starting to slow, with growth coming in at just 3.3 per cent in the second quarter, a figure the Bank admitted was weaker than projected. However, the central bank also pointed to stronger indicators of domestic demand as consumption grew by roughly 9.5 per cent and business investment rose nearly 12 per cent.Article content

“Expect to see the effects of restrictive policy showing up more clearly this fall and winter, giving the central bank the greenlight to pause rate hikes,” Mendes wrote last week, adding that the economic impacts seen from rising rates so far were only the tip of the iceberg.

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