BANK OF CANADA MAY BE FORCED INTO EARLY RATE HIKE
“The bank thinks that there’s a lot of capacity which I don’t think there really is, and the facts on the ground of rising prices show that,” Wolf said Wednesday at the Bloomberg Canadian Fixed Income Conference. That’s why investor expectations that the bank will begin lifting its benchmark interest rate from 0.25 per cent in the second half of next year are off base, he said.
The yield on benchmark five-year Canadian debt rose more than 3 basis points to 1.128 per cent as of 3 p.m. in Toronto, the highest level since February.
The consumer price index rose 4.1 per cent in August from a year earlier, the fastest pace since 2003, marking the fifth consecutive month of inflation readings above the Bank of Canada’s 3 per cent cap.
Story by: Financial Post