Tausi Insider

The Bank of Canada is expected to conclude a historic year marked by high inflation and aggressive monetary policy tightening with one more interest rate hike on Wednesday. Forecasters anticipate the central bank will raise its key interest rate, which is currently at 3.75 per cent, by either a quarter or half a percentage point next week. Even the smaller hike would bring the interest rate to the highest it’s been since 2008. In the wake of rapidly rising inflation this year, the Bank of Canada has raised its key interest rate six consecutive times since March, racing to clamp down on inflation expectations before they became unmoored. After raising its key rate by a historic full percentage point in July, the Bank of Canada has tapered the size of its rate hikes. In September, it announced a three-quarter percentage point rate hike, followed by half a percentage point in October. Now, the end of the rate hike cycle appears to be near. Bank of Canada governor Tiff Macklem said as mu...

Big bank economists say the surprisingly resilient economy is likely headed for a mild slowdown in the year ahead, but that recent events show how difficult it is to predict the future. Speaking at an Economic Club of Canada panel, Scotiabank BNS-T chief economist Jean-Francois Perrault said the economy could be headed for the mythical soft landing that policy-makers have long aimed for before but have never really achieved. TD TD-T chief economist Beata Caranci said that while the bank is forecasting about 100,000 job losses this year, it’s much less than the 300,000 that would normally occur in a recession. Caranci said emerging factors like the reopening of the Chinese economy could however push inflation higher and force rates to stay higher for longer, which would worsen the economic hit. RBC RY-T chief economist Craig Wright said the bank is sticking to its forecast of a recession that it’s been predicting since last July, as a number of long-term tailwinds including free trade...