The Bank of Canada is expected to raise interest rates for the second time in a row by 0.75 percentage points on Wednesday, as the central bank put aside recession fears and focused on curbing underlying inflationary pressures.
Nine of 12 economists polled by The Wall Street Journal forecast the Bank of Canada will raise the overnight call rate by 0.75 percentage points to 4.0% — the highest level in nearly 15 years. Three economists said they expected a 0.5 percentage point rate hike.
“The problem is that the Bank of Canada doesn’t want to take the risk and wait to see the lagged impact on inflation of falling commodity prices and global supply chain disruptions,” said Sebastien Lavoie, chief economist at Laurentian Bank Securities, who like most predicts the central bank will raise interest rates by 0.75 percentage points.
The Fed is scheduled to issue a policy decision next week, on Nov. 2, and is also expected to raise interest rates by 0.75 percentage points for the fourth time in a row.
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