Will economists and market prices predict Bank of Canada’s next move?

Key lending rates have changed – the first increase since July 2007.

Stats Canada has released their first quarter report and the economy is hot as its findings say.  Real GDP has grown 6.1%, the biggest increase in a decade. Residential investment continued to increase for the fourth quarter in a row.

In an effort to slow inflation, Bloomberg has surveyed and 25 of 27 economists say the Bank of Canada will raise the lending rate by a quarter percent.  The markets (predicted by the Overnight Index Swap) are slightly less sure at 70-80% chance of a rate boost.

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One Response to Will economists and market prices predict Bank of Canada’s next move?

  1. J. Shilmar says:

    So the Bank of Canada raised rates 1/4 point but I think the real question will be, when will they raise rates again.

    The minutes from the July meeting should prove interesting and give us an idea of what direction they are heading in.

    I think as long as the Canadian economy continues to look strong and some stability comes from the global arena then they will probably hold rates for awhile before raising them again.

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