Goldman Sachs' Prediction for the BOC is to Act "More Firmly" and Raise the Policy Rate by 75 bps.

The Bank of Canada (BOC) is scheduled to announce its interest rate decision at 1400 GMT on Wednesday. Goldman Sachs analysts provide an early preview of what to anticipate.

July 13, 2022 - 11:35 AM 286 views

Goldman Sachs' Prediction for the BOC is to Act "More Firmly" and Raise the Policy Rate by 75 bps.

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© Goldman Sachs' Prediction for the BOC is to Act "More Firmly" and Raise the Policy Rate by 75 bps.

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The Bank of Canada (BOC) is scheduled to announce its interest rate decision at 1400 GMT on Wednesday. Goldman Sachs analysts provide an early preview of what to anticipate.

Important Quotes

"We anticipate the BoC to raise the policy rate by 75 basis points this week, to 2.25 percent, and to act "more firmly." After this week, we anticipate a further 75bp increase in September, 50bp increases in October and December, and a terminal rate of 4.25 percent in Q1 2023.

We anticipate that headline CPI inflation will remain over 7 percent this year, and we expect the BoC to act swiftly in response to any indications of entrenched inflation.

"Our hawkish prediction for the terminal rate faces downside risks. The Bank of Canada is likely to raise interest rates less frequently than anticipated in December and January if the US economy slows down even more or the housing market crashes."

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