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Brief Sell-Side Analyst Overview #3: Wed BoC Policy Annc

CANADA
Goldman Sachs: Steady at 0.25 with liftoff at the January 26, 2022 meeting followed by three additional hikes in 2022.
  • At the October meeting, the BoC ended QE and pulled forward the projected timing for liftoff to the “middle quarters of 2022” (vs. 'second half' previously). Economic data since then have been firm, and we expect the BoC to acknowledge the significant labor market progress on Wednesday."
  • GS also expects the BoC "to stress Omicron related uncertainty but to focus more on upside risks to inflation. We still expect the BoC to liftoff in January followed by three more hikes next year, and expect policymakers to open the door for a January rate hike on Wednesday.
JP Morgan: Expects the BoC to hold rate steady at 0.25, recognizing the strong labor market and omicron uncertainty going into the winter.
  • JPM doesn’t expect the Bank's "general tone to change as economic reports have largely aligned with its October forecasts. The Bank likely will sound upbeat about the evolution of the labor market but we expect the Omicron variant will enter the Bank’s narrative. It will be interesting to see if the Bank retires the word 'transitory' as the Federal Reserve has indicated it will."
  • JPM has been "expecting the first 25bp hike in the policy rate in July 2022, around the midpoint of the timeframe. We believe that heightened uncertainty around labor market slack and persistent inflation pressures raise the risk that the Bank will start the hiking cycle earlier than we expect."
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