Tightening monetary policy by the Bank of Canada should slow demand and help to bring inflation down, though that will take time and rising oil and commodity prices caused by the Russian invasion of Ukraine presents a risk of high inflation persisting longer than expected. Volatility in global financial markets briefly interrupted the upward march of long-term interest rates, however bond markets are once again pricing in an aggressively inflation-fighting Bank of Canada. We expect the Bank will increase its overnight rate five more times over the next year, bringing its key policy rate to 1.75 per cent before pausing to assess the impact of higher interest rates on the economy.


For more information, please contact: Gino Pezzani.
Link: https://mailchi.mp/bcrea/canadian-inflation-february-2022
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