The consensus among banks is even more aggressive than what\u0027s expected in the market
Canadian Imperial Bank of Commerce, National Bank of Canada and Toronto-Dominion Bank ramped up their calls for the central bank to raise its policy rate by half a percentage point to one per cent at its April 13 decision. They join Bank of Montreal, Bank of Nova Scotia and Royal Bank of Canada in forecasting what would be the first 50-basis-point hike since 2000.
The consensus among Canadian banks, which emerged Monday after a quarterly survey of executives showed firms hitting capacity constraints amid deepening inflation worries, is even more aggressive than what’s expected in the market. Investors in overnight swaps are pricing in about an 80 per cent chance of an outsized hike.
Gross domestic product data released Thursday showed the economy gaining momentum as restrictions meant to counter the omicron variant of COVID-19 were eased.Article content “There’s enough there to give the Bank a pass at hiking 50 basis points, especially following the February flash GDP number,” Andrew Kelvin, chief Canada strategist at TD Securities, said by email. “In this environment, we think it probably makes sense for them to take the path of least resistance.”
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