Governor Tiff Macklem is expected to raise the central bank’s policy rate by three quarters of a percentage point on Wednesday, to 2.25 per cent -- the largest increase since 1998. That follows back-to-back half-percentage-point hikes in April and June, making the current tightening effort one of the most aggressive ever.
Policy makers will also outline new forecasts for growth and inflation at the decision, due at 10 a.m. in Ottawa, and will likely signal more tightening is needed in coming months. Macklem speaks to reporters an hour later, however the bank said Tuesday the governor will appear by video link because of a recent COVID-19 infection.
Tiff Macklem, shown during an interview in April, is poised to deliver the Bank of Canada's biggest increase to borrowing costs since 1998. The numbers, meanwhile, are likely to get worse before improving. The next annual inflation reading due next week may even exceed 8 per cent, after hitting a yearly clip 7.7 per cent in May, though most economists believe it’s likely near its peak.
Markets, meanwhile, see the emergency over by this time next year, at which time investors are betting Macklem will start to consider rate cuts.
Interest rates should never have gone below 3%. No many people will pay for their error.
Finally I'll be able to afford a home.
I am wondering when the millennials figure out what negative home equity is
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