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BoC Wants Policy Rate 'Slightly' Above 3% Quickly

CANADA

"By front-loading interest rate increases now, we are trying to avoid the need for even higher interest rates down the road," he said in an opening statement for a press conference. "Front-loaded tightening cycles tend to be followed by softer landings. This argues for getting our policy rate quickly to the top end or slightly above the neutral range."


It sees further pullback in BAX implied yields from the earlier peak surge following the US CPI beat and reaction to the 100bp hike, but is still 17bps higher for the Dec'22. There's a similar story in GoCs, with 2Y yields 11bps higher on the day for an additional 10.5bp decline in 2s10s to -12bps.

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