{"id":28828,"date":"2022-12-07T17:06:55","date_gmt":"2022-12-07T17:06:55","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2022\/12\/07\/bank-of-canada-hikes-interest-rate-to-4-25-economists-view\/"},"modified":"2022-12-07T17:06:55","modified_gmt":"2022-12-07T17:06:55","slug":"bank-of-canada-hikes-interest-rate-to-4-25-economists-view","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2022\/12\/07\/bank-of-canada-hikes-interest-rate-to-4-25-economists-view\/","title":{"rendered":"Bank of Canada hikes interest rate to 4.25% \u2014 economists&#8217; view"},"content":{"rendered":"<div style=\"text-align:center\"><\/div><p> \n<\/p>\n<div id=\"\">\n<header aria-label=\"Beginning of Article\" class=\"article-header\">\n<div class=\"sponsored-meta sponsored-meta--story\" data-aqa=\"sponsorship\">\n<div class=\"sponsored-meta-content\">\n<div class=\"sponsored-meta-content-text\"> This section is <\/p>\n<div class=\"popover\" data-aqa=\"popover\" data-click-to-appear=\"True\" data-container=\"\" data-container-offset=\"\" data-popover-component=\"\" data-position=\"\"> <button class=\"popover__trigger\"> <span class=\"popover__text\"> Presented <\/span> <\/button> <\/p>\n<div aria-describedby=\"popover-desc-sponsored-popup\" class=\"popover__content\" hidden=\"\" role=\"dialog\">\n<div class=\"popover__content__wrapper\">\n<p> This section was produced by the editorial department. The client was not given the opportunity to put restrictions on the content or review it prior to publication. <\/p>\n<p> <button class=\"popover__content__close\" tabindex=\"-1\" title=\"Close\"> <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\" class=\"icon--close\" height=\"12\" version=\"1.1\" viewbox=\"0 0 12 12\" width=\"12\"><polygon points=\"12 0.95 11.05 0 6 5.05 0.95 0 0 0.95 5.05 6 0 11.05 0.95 12 6 6.95 11.05 12 12 11.05 6.95 6\"\/><\/svg><\/button> <\/div><\/div><\/div>\n<p> by  HSBC  <\/p><\/div>\n<div class=\"sponsored-meta-content-logo-container\">   <\/div><\/div><\/div>\n<nav aria-label=\"Breadcrumb\" class=\"breadcrumbs\" data-aqa=\"nav-breadcrumb\">\n<h2 class=\"visually-hidden\">Breadcrumb Trail Links<\/h2>\n<ol class=\"breadcrumbs__items list-unstyled\">\n<li class=\"breadcrumbs__item\"> News <\/li>\n<li class=\"breadcrumbs__item\"> Economy <\/li>\n<\/ol>\n<\/nav>\n<div class=\"article-header__detail\">\n<div class=\"article-header__detail__texts\">\n<p class=\"article-subtitle\"> Language signals future hikes are no longer a foregone conclusion <\/p>\n<\/p><\/div>\n<figure class=\"featured-image\" data-aqa=\"featured-image\"><picture class=\"featured-image__ratio\"><img loading=\"lazy\" decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph-2.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph-2.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph-2.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph-2.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph-2.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph-2.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph-2.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph-2.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph-2.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph-2.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph-2.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"Bank of Canada Governor Tiff Macklem raised the benchmark interest rate a half point on Dec. 7.\" class=\"featured-image__image type:primaryImage\" height=\"750\" fifu-data-src=\"https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph-2.jpg?quality=90&strip=all&w=288&h=216&ssl=1\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph-2.jpg?quality=90&strip=all&w=288&h=216,\n                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph-2.jpg?quality=90&strip=all&w=576&h=432 2x\" width=\"1000\"\/><\/picture><figcaption class=\"featured-image__caption image-caption\"><span class=\"caption\">Bank of Canada Governor Tiff Macklem raised the benchmark interest rate a half point on Dec. 7.<\/span> <span class=\"credit\">Photo by Adrian Wyld<\/span> \/<span class=\"distributor\">The Canadian Press<\/span> <\/figcaption><\/figure>\n<\/div>\n<\/header>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p data-async=\"\">Bank of Canada governor Tiff Macklem delivered another 50-basis-point rate hike Wednesday, pushing the benchmark overnight lending rate to 4.25 per cent.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment6481612326048199178654882306457600\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment6481612326048199178654882306457600\">Advertisement 2<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-2\">\n<div class=\"ad__inner__container\" data-ad=\"[[6,6],[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-interscroller=\"6x6\" data-ad-loc=\"2\" data-ad-mobile=\"[[6,6],[320,50],[300,50],[300,250],[300,600]]\" data-aqa=\"advertisement\" id=\"ad-2\" style=\"--desktopHeight:250px;--mobileHeight:600px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>The latest increase was the seventh since March of this year, marking an extraordinary four percentage points worth of increases, a rate of hiking not seen since the mid-1990s, wrote Alberta Central economist Charles St-Arnaud in his reaction to the Bank\u2019s decision.<\/p>\n<\/section>\n<div class=\"article-content__widget-group article-content__widget-group--content-slot6 article-content__widget-group--newsletter-slot\">\n<section aria-labelledby=\"FinancialPostTopStories919934315027469657484281964920832\" class=\"newsletter-widget fp-headlinenews background--primary-light-gradient\" data-account-id=\"b9d3df2fccd108b5eff3c44f573b2cd6\" data-aqa=\"widget-newsletter\" data-newsletter=\"single\" data-newsletter-component=\"\" data-target-list=\"FP_HeadlineNews\" data-widget=\"newsletter\"><img decoding=\"async\" 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You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300 <\/small> <\/div>\n<div class=\"js-submit-success\" hidden=\"\" id=\"submitSuccessFP_HeadlineNews\">\n<h3 class=\"newsletter__feedback--heading\">Thanks for signing up!<\/h3>\n<p class=\"newsletter-widget__text\">A welcome email is on its way. If you don&#8217;t see it, please check your junk folder.<\/p>\n<p class=\"newsletter-widget__text newsletter__feedback--last\">The next issue of Financial Post Top Stories will soon be in your inbox.<\/p>\n<\/p><\/div>\n<p class=\"newsletter-widget__text js-submit-error\" hidden=\"\" id=\"submitErrorFP_HeadlineNews\"> We encountered an issue signing you up. Please try again <\/p>\n<\/p><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>The move was \u201ca modest surprise for markets,\u201d according to Stephen Brown, economist for Canada at Capital Economics, who estimated that about two-thirds of the market was expecting a 25-basis-point increase.<\/p>\n<\/section>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>The last time the rate, which guides how much consumers pay to borrow money, was this high was back in December 2007 just prior to the Great Recession taking hold of the global economy.<\/p>\n<figure class=\"embedded-image\" data-aqa=\"embed-image\"><picture class=\"embedded-image__ratio\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/BoC-1207-2022.png?quality=90&strip=all&w=288&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/BoC-1207-2022.png?quality=90&strip=all&w=288&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/BoC-1207-2022.png?quality=90&strip=all&w=288&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/BoC-1207-2022.png?quality=90&strip=all&w=288&ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/BoC-1207-2022.png?quality=90&strip=all&w=288&ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/BoC-1207-2022.png?quality=90&strip=all&w=288&ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/BoC-1207-2022.png?quality=90&strip=all&w=288&ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/BoC-1207-2022.png?quality=90&strip=all&w=288&ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/BoC-1207-2022.png?quality=90&strip=all&w=288&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/BoC-1207-2022.png?quality=90&strip=all&w=288&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/BoC-1207-2022.png?quality=90&strip=all&w=288&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"\" class=\"embedded-image__image lazyload\" fifu-data-src=\"https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/BoC-1207-2022.png?quality=90&strip=all&w=288&ssl=1\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/BoC-1207-2022.png?quality=90&strip=all&w=288,\n                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/BoC-1207-2022.png?quality=90&strip=all&w=576 2x\" height=\"763\" loading=\"lazy\" width=\"1000\"\/><\/picture><\/figure>\n<p data-async=\"\">What mainly caught economists\u2019 attention was the tempering of language in the Bank\u2019s statement signalling that future hikes are no longer a foregone conclusion.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment620320385151273906624165694144512\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment620320385151273906624165694144512\">Advertisement 3<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-3\">\n<div class=\"ad__inner__container\" data-ad=\"[[7,7],[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-interscroller=\"7x7\" data-ad-loc=\"3\" data-ad-mobile=\"[[7,7],[300,250],[320,50],[300,50]]\" data-aqa=\"advertisement\" id=\"ad-3\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>\u201cWhereas the Bank previously told us that it expected \u201cthat the policy interest rate will need to rise further\u201d, it now tells us that it will \u201cbe considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target,\u201d Brown wrote in a note to clients.<\/p>\n<p>Economists noted that there is plenty of economic data coming down the pipeline between now and the next Bank meeting scheduled for Jan. 25 to inform what it does next. Among the relevant data are <span>two consumer price index reports, another month of GDP and jobs numbers, plus the Bank of Canada\u2019s quarterly Business Outlook Survey and its Canadian Survey of Consumer Expectations.<\/span><\/p>\n<p>Here is what the economists are saying about this rate increase and what\u2019s ahead:<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment7727033425100196405426551487725568\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment7727033425100196405426551487725568\">Advertisement 4<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-4\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"4\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-4\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<h2><span style=\"font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, Oxygen-Sans, Ubuntu, Cantarell, 'Helvetica Neue', sans-serif\">Stephen Brown, Capital Economics<\/span><\/h2>\n<p>\u201cThe Bank of Canada delivered a somewhat dovish 50-basis-point policy rate hike today by softening its explicit forward guidance that interest rates will need to rise further. We would not rule out a final 25-basis-point interest rate hike in January, but the Bank is very close to the end of its tightening cycle.<\/p>\n<p>\u201cFor now, we assume that the resilience of the labour market and a desire not to send too dovish a message will cause the Bank to enact one final 25-basis-point hike in January. But with Canadian oil prices tumbling below US$50 in recent days, almost 40 per cent lower than the Bank assumed in its October Monetary Policy Report, <strong>it would not be a complete surprise if today marks the last hike in this cycle.<\/strong> As there is no press conference today, we will have to wait for the speech from Deputy Governor Sharon Kozicki tomorrow to gauge the Bank\u2019s thinking.\u201d<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment4575955840720549925727202443264000\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment4575955840720549925727202443264000\">Advertisement 5<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-5\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"5\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-5\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<section aria-labelledby=\"moreTopicLabel539773486663896995947002508345344\" class=\"more-topic\" data-aqa=\"embed-more-topic\" data-carousel-component=\"\" data-carousel-icon-button=\"\" data-carousel-type=\"list\"> <button aria-hidden=\"true\" class=\"more-topic__button-prev\" data-carousel-prev=\"\" tabindex=\"-1\" title=\"previous\" type=\"button\"\/> <\/p>\n<ol class=\"more-topic__items list-unstyled\" data-carousel-slide-list=\"\" tabindex=\"0\">\n<li class=\"more-topic__item\" data-carousel-item=\"\">\n<h3 class=\"more-topic__item-text\"> <span class=\"more-topic__item-text-clamp\"> Bank of Canada raises interest rate to 4.25% in what may be the last hike <\/span> <\/h3>\n<\/li>\n<li class=\"more-topic__item\" data-carousel-item=\"\">  <picture class=\"more-topic__item-image\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/house-sold-0125.jpeg?h=96&strip=all&quality=80&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/house-sold-0125.jpeg?h=96&strip=all&quality=80&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/house-sold-0125.jpeg?h=96&strip=all&quality=80&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/house-sold-0125.jpeg?h=96&strip=all&quality=80&ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/house-sold-0125.jpeg?h=96&strip=all&quality=80&ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/house-sold-0125.jpeg?h=96&strip=all&quality=80&ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/house-sold-0125.jpeg?h=96&strip=all&quality=80&ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/house-sold-0125.jpeg?h=96&strip=all&quality=80&ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/house-sold-0125.jpeg?h=96&strip=all&quality=80&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/house-sold-0125.jpeg?h=96&strip=all&quality=80&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/house-sold-0125.jpeg?h=96&strip=all&quality=80&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"Rising interest rates have significantly cooled the housing market and for the first time mortgage origination has dropped below pre-pandemic levels.\" class=\"lazyload\" fifu-data-src=\"https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/house-sold-0125.jpeg?h=96&strip=all&quality=80&ssl=1\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/house-sold-0125.jpeg?h=96&strip=all&quality=80,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/house-sold-0125.jpeg?h=192&strip=all&quality=80 2x,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/house-sold-0125.jpeg?h=288&strip=all&quality=80 3x\" width=\"96\"\/><\/picture>\n<h3 class=\"more-topic__item-text\"> <span class=\"more-topic__item-text-clamp\"> What the Bank of Canada hike will mean for mortgage borrowers <\/span> <\/h3>\n<\/li>\n<\/ol>\n<p><button aria-hidden=\"true\" class=\"more-topic__button-next\" data-carousel-next=\"\" tabindex=\"-1\" title=\"next\" type=\"button\"\/> <\/section>\n<h2>Charles St-Arnaud, Alberta Central<\/h2>\n<p>\u201cThe key message in today\u2019s decision is that the central bank remains committed to fighting inflation but that we are at or very close to the peak in interest rates. As such, the BoC signals that whether further hikes are required will depend on incoming data-dependent. In our view, it means that if inflation continues to show signs of peaking and losing momentum and we see some loosening in the labour market, the BoC will leave interest rates unchanged.<\/p>\n<p>\u201cToday\u2019s decision supports our view that the BoC is likely done with its tightening. As such, <strong>we believe that interest rates will stay on hold for at least the first half of 2023<\/strong>, as we believe that inflation has likely peaked.\u201d<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment4908163195673141720720054522216448\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment4908163195673141720720054522216448\">Advertisement 6<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-6\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"6\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-6\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<h2>Josh Nye, RBC Economics<\/h2>\n<p>\u201cThe policy statement wasn\u2019t as hawkish as the decision itself \u2014 in fact the BoC\u2019s updated forward guidance features a softer tightening bias than we expected. Rather than suggesting the \u201cthe policy interest rate will need to rise further,\u201d today\u2019s guidance is that \u2018Governing Council will be considering whether the policy interest rate needs to rise further.\u2019 <strong>That clearly opens the door to a pause as soon as the next meeting in January<\/strong>, and in our view frames that decision as between 0 and 25 basis points.\u201d<\/p>\n<h2>Avery Shenfeld, CIBC Economics<\/h2>\n<p>\u201cThe statement cited signs that the economy will see a stall in growth in coming quarters, but noted that the recent deceleration in core inflation still leaves it above target. We see the overnight rate plateauing at this 4.25 per cent level, but unlike what financial markets have been presuming in the last couple of weeks as bond yields tumbled, <strong>we expect the Bank of Canada to keep the overnight rate there through 2023, and ease only gradually in 2024<\/strong>.\u201d<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment2842496652060237499481245179969536\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment2842496652060237499481245179969536\">Advertisement 7<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-7\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"7\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-7\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<h2>Douglas Porter, BMO Economics<\/h2>\n<p>\u201cToday\u2019s relatively aggressive hike suggests that the Bank remains acutely concerned about still-high inflation expectations, even amid a clear cooling in domestic demand and some early indications that underlying inflation is losing momentum. In recognition of those latter factors, the Bank has opened the door to the possibility that this could be the last rate hike of the cycle. However, we are more concerned than the consensus on the stickiness of underlying inflation, and suspect that the data will direct the way to <strong>one more 25-basis-point hike at the next meeting<\/strong>.\u201d<\/p>\n<h2>James Orlando, TD Economics<\/h2>\n<p>\u201cWe don\u2019t think the BoC is done yet, but it is quickly approaching the end of its hiking cycle. As all Canadians know, the rapid rate hikes over 2022 have caused a dramatic adjustment in the real estate market, and we are starting to see this in consumer spending data. We expect this to continue to weigh on the economy over 2023 as the lagged effects of past hikes filter through. <strong>We expect the BoC will deliver its final rate hike in January, bringing the policy rate to 4.5 per cent<\/strong>. At that time, it can move to the sidelines, allowing the economy to recalibrate and let inflation continue its downward trend over 2023.\u201d<\/p>\n<p data-async=\"\"><em>\u2022 Email: gmvsuhanic@postmedia.com | Twitter: <a class=\"twitter-follow-button\" data-evt=\"click\" data-evt-typ=\"click\" data-evt-val=\"{\" control_fields=\"\" link=\"\" href=\"https:\/\/twitter.com\/gsuhanic\" rel=\"nofollow noopener\" target=\"_blank\">gsuhanic<\/a><\/em><\/p>\n<p> <iframe loading=\"lazy\" frameborder=\"0\" height=\"1200\" id=\"\" src=\"https:\/\/modules.wearehearken.com\/financial-post\/embed\/9353\/share\" style=\"--height: 1200px; \" width=\"\"><\/iframe> <\/p>\n<\/section>\n<section class=\"article-content__share-group article-delimiter\" data-evt=\"beforeunload\" data-evt-typ=\"page_scroll\" data-evt-val=\"{\" control_fields=\"\">\n<h2 class=\"visually-hidden\">Share this article in your social network<\/h2>\n<\/section>\n<div class=\"article-content__ad-group\">\n<div class=\"ad__section-border ad__section-border--category visually-hidden\">\n<section aria-describedby=\"advertisment2218035894327210452236995978592256\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment2218035894327210452236995978592256\">Advertisement <\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-acceptable\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-acceptable=\"\" data-ad-loc=\"1\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-acceptable\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div><\/div>\n<footer aria-label=\"Article Comments\" class=\"article-footer\">\n<section class=\"comments__section\" data-aqa=\"viafoura-comments\" id=\"comments\">\n<h3 class=\"widget-title comments-anchor\" id=\"comments-area\">Comments<\/h3>\n<p class=\"comments__section-disclaimer\"> Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications\u2014you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings. <\/p>\n<\/section>\n<\/footer>\n<\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/>\n<br \/>Bank of Canada hikes interest rate to 4.25% \u2014 economists&#8217; view<\/a><br \/>\n<br \/>2022-12-07 17:06:55<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This section is Presented This section was produced by the editorial department. 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