Craig Alexander, the chief economist at Deloitte Canada, said, “The market has priced in a three-quarters-of-a-point increase because that’s what the US Federal Reserve delivered.
Canada’s economy is currently overlaying a recession, more so since Friday’s jobs report showed a notable dwindle in employment. So can the bank surprise the markets?
“We’re sitting at record low unemployment and very high inflation. There’s no reason, right now, for interest rates to be below that long-run neutral range,” said Nathan Janzen, senior economist at RBC Capital Markets. He further added that
“We’re leaning towards a 75 basis point hike being the most likely. But, by the same logic, 100 basis points would still only get you into the midpoint of their neutral range.”