All eyes will be on the Bank of Canada this morning as it makes its latest scheduled interest-rate announcement.
Economists widely believe that based on the economic environment, it鈥檚 likely that governor Stephen Poloz will raise the central bank鈥檚 benchmark interest rate today for a third time since last summer.
Many note that Poloz has indicated that interest rate decisions will be data dependent.
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In addition to a stronger-than-expected jobs report released earlier this month, the central bank鈥檚 Business Outlook Survey revealed that sentiment remained positive during the final quarter of 2017.
But many economists say a rate hike today doesn鈥檛 mean the Bank of Canada is poised to start a rapid tightening cycle.
Given high household debt levels, the unknown impact of tighter stress tests for uninsured mortgages that came into effect this year and uncertainty surrounding NAFTA renegotiations, the bank must be cautious about how quickly it raises rates in order to avoid derailing the economy.
Scotiabank Economics is forecasting 75 basis points of gradual tightening this year spread out throughout 2018, while TD Economics expects a gradual pace of tightening over the next two years of about 25 basis points every six months.
RBC Economics Research says it expects the Bank of Canada to raise the overnight rate by 25 basis points to 1.25 per cent today.
Related:
The Canadian Press
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