Ok, heads up, the BoC just hiked.
This wasn’t entirely unexpected given the hot economic data that’s been coming in fast and furious over the past couple of months, but it is extremely notable coming after the July hike.
Here’s the reaction in the loonie which surged to a fresh two-year high:
This time around, specs were on the right side, having been burned horribly earlier this year:
And here’s the breakdown from Bloomberg:
Bank of Canada raises overnight rate target to 1%, est. 0.75%
- “close attention will be paid to the sensitivity of the economy to higher interest rates” given elevated household indebtedness
- Bank will give particular focus to evolution of economy’s potential and labor market conditions
- Inflation remains below 2% but has evolved “largely as expected” since July MPR
- Excess capacity remains in labor market, wage and price pressures more subdued than historical relationships suggest
- “Geopolitical risks and uncertainties around international trade and fiscal policies remain”
- Consumer spending remains robust, aided by solid employment and income growth
- Widespread strength in business investment and exports; housing sector cooling in response to recent tax and finance policies
- “Global economic expansion is becoming more synchronous”
