The central bank is more likely to bring its overnight rate to between two and three per cent, though not anytime soon, said David Macdonald, senior economist with the Canadian Centre for Policy Alternatives.
The central bank is widely expected to hold rates high in the near term as it seeks to quell inflation. But even once rates begin to fall, economists said ultralow rates aren't in the cards. “One of the points I've been stressing with our clients is, the speed at which rates went up will not be the speed at which they go down.”
“A higher neutral rate means that the current policy rate may not be as restrictive as the thinks,” they wrote.
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