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BoA Look For 50bp Hikes At Next Three Meetings

CANADA
  • BoA expect the Bank of Canada to hike 50bp in April, June and July and then 25bp in each subsequent meeting until the policy rate reaches 3.25% (March 2023) vs previously a terminal rate of 3.00% by Dec 2023.
  • The new path sees rates at the upper limit of the BoC's estimate of neutral of 2.75% by year-end (i.e. 225bps of hikes still to come).
  • OIS currently sits with a 50bp hike fully priced for the April 13 meeting and, whilst volatile, 215bp of hikes for the six meetings this year.
  • BoA also expect QT to be formalized at the April meeting.
  • Their GDP growth forecast is trimmed from 3.3% to 3.1% for 2023, with 2022 unchanged at 4.2%.

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