Skip to main content

Featured

5 Things to Know Today: BoC Hike Bets, TSX Slide, Oil Near $100 (Oct. 23)

  Canadian Money Brief • Friday, October 23, 2026 The Bank of Canada decision is five days away, the TSX gave back most of Wednesday's gains, and oil is flirting with US$100 again. Here are the five things Canadian wallets need to know today. 1. Markets Lean Toward a Bank of Canada Hike on Oct. 28 A decision that looked like a ninth straight hold is now a genuine coin flip with a hawkish tilt. After Governor Tiff Macklem warned that there is "no resolution in sight" for the Middle East conflict, BMO and Desjardins flipped to a hike call, Scotiabank firmed up its call and Goldman Sachs joined them, all looking for a quarter-point move to 2.50%. Overnight swaps priced about an 87% chance of a hike earlier this week, though other economists still argue for a hold, pointing to September's 68,000 job losses and a 6.5% unemployment rate. What it means for you: A quarter-point hike adds roughly $21 a month in interest for every $100,000 of variable-rate borrowing (HELOCs an...
Post a Comment
Read more

article

Labels

Inflation surprises keep Bank of Canada from cutting rates

 

The Bank of Canada (BoC) is expected to maintain its key overnight rate at 5% on Wednesday, despite the sluggish economic growth and the global trend of easing monetary policy. The reason is the persistent inflation pressure that has exceeded the BoC’s 2% target for four consecutive months.

The latest inflation data for December showed a 3.4% increase in the consumer price index, the highest since May 2021. The core inflation, which excludes volatile items such as food and energy, also rose to 2.8%, the highest since June 2019. These numbers surprised the markets, which had anticipated a rate cut by the BoC in the first half of 2024.

However, the BoC is likely to wait for more evidence that the inflation spike is temporary and not driven by underlying demand pressures. The BoC has attributed the high inflation to transitory factors such as supply chain disruptions, higher commodity prices, and base effects from the pandemic. The BoC expects inflation to return to the 2% target by the end of 2025.

The BoC will also release its quarterly Monetary Policy Report on Wednesday, which will provide updated forecasts for the Canadian economy. In October, the BoC projected a 0.8% annualized growth rate for both the third and fourth quarters of 2023, well below the potential output growth of around 2%. The BoC will likely revise down its growth outlook for 2024, reflecting the impact of the Omicron variant, the uncertainty over the fiscal policy, and the weak business investment.

The BoC will also face questions about its communication strategy, which has been criticized for being too vague and inconsistent. The BoC has not provided any forward guidance on its future policy actions, unlike its counterparts such as the Federal Reserve and the European Central Bank. The BoC has also been reluctant to use unconventional tools such as quantitative easing or negative interest rates, which could provide more stimulus to the economy.

The BoC will announce its rate decision and the Monetary Policy Report at 9:45 am ET on Wednesday, followed by a press conference by Governor Tiff Macklem at 11:15 am ET. The markets will closely watch for any hints on the BoC’s policy stance and its assessment of the inflation and growth outlook.

Labels:

Comments

Post a Comment