July 15, 2018
As expected, Stephen S. Poloz, the Governor of the Bank of Canada has announced a few days ago that the Bank of Canada hiked its key overnight rate 25 basis points to 1.5%.
He also mentioned that he expected that the Bank to gradually hike the benchmark rate until it reaches 2% or 2-1/4% by the end of 2019, implying another 2 or 3 rate hikes by the end of next year. However, Mr. Ploloz was uncertain as to how quickly this would happen. This will be discussed in the Governing Council of the Bank which is scheduled to meet again on September 5, 2018.
Recent data by the Bank of Canada suggests that housing markets are beginning to stabilize following a weak start to 2018.. Accordingly, the housing will contribute a mere 0.1 percentage points to growth this year, with no contribution in 2019 and a slight negative rate of contribution in 2020 (see Table below).