After waiting for half a year, Stephen Poloz appears ready to get back on his rate-hiking path this week.
Recent signals from the Bank of Canada governor, combined with strong economic data, have experts widely predicting Poloz will raise his trend-setting rate Wednesday from its current level of 1.25 per cent.
Citing a cautious, data-dependent approach, Poloz hasn鈥檛 touched the rate since he increased it in January, a move that followed increases last year in September and July.
Another rate increase this week would come with Canada facing a number of trade-related uncertainties, including NAFTA talks, U.S. steel and aluminum tariffs and the threat of more duties on the economically critical automotive sector.
But TD chief economist Beata Caranci says she expects Poloz to work with the data he has in front of him and many analysts point to healthy numbers of late 鈥� including the Bank of Canada鈥檚 own survey on business sentiment, jobs numbers and growth in wages.
Caranci says if the trade dispute deteriorates further she believes hiking the interest rate now would give Poloz more flexibility to possibly lower it down the road, if necessary.
While expectations are high that Poloz will raise the rate this week, some experts predict the ongoing trade uncertainty will be enough to keep Poloz on hold for a little longer.
The National Bank of Canada wrote in a recent note that trade developments since the central bank鈥檚 last meeting, including stalled NAFTA talks and a possible trade war between the U.S. and China, will be enough to give Poloz pause.
In making the call, the National Bank acknowledged that it鈥檚 an outlier in a market that widely sees the right conditions for another increase.
The Canadian Press
Like us on and follow us on .
