The Bank of Canada is expected to include a ‘hawkish’ signal that rates will be ‘higher for longer’ at Wednesday’s interest rate announcement, according to a new report by Capital Economics.
Given a reluctant to raise interest rates any more than it already has, the Bank is likely to engage in a new round of ‘forward guidance’ seeking to assure Canadians that rates will not be coming down any time soon.
The hope is that this will work to slow the Canadian economy without actually imposing any more borrowing costs on holders of variable rate loans.
