Prepare for interest rate rise says CIBC economist

by Steve Randall04 Sep 2017
The Bank of Canada is expected to increase interest rates this week according to CIBC economist Avery Shenfeld.

“After [last week’s] blowout GDP figures, we now see little reason for the BoC to wait before hiking interest rates again,” Shenfeld wrote in a client note, adding that it is a close call due to the strength of the loonie.

However, while the BoC governor Stephen Poloz is concerned about the strong currency, Shenfeld says that in comparison to a basket of currencies being watched by the central bank, the loonie is weaker than it was at the time of the previous hike.

On a positive note for mortgages, Shenfeld predicts that an interest rate increase will be accompanied by a statement that no further rates are imminent, having reversed the two previous cuts.

Shenfeld is in a minority calling for a rate rise this month with 24 of 33 economists polled by Reuters expecting no change until at least October.

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