CIBC Review on BoC

CIBC analysts said they were a "bit puzzled by the scale of the disconnect between the strength of employment and the shortfall in GDP from pre-pandemic trends, the jobs data have made the case that a modest dose of earlier rate hikes is unlikely to stall the recovery, and could potentially be of value in defending against entrenched inflation."

• The BoC statement still gave a nod to the uncertainties inherent in the pandemic and the arrival of the omicron variant, and given the potential impacts on household behavior, that should still be enough to forestall a January rate hike.
• But if the winter Covid wave fades out as some epidemiologists still expect, the Bank will be ready to rumble in its fight against inflation, and including an initial quarter point in April, we expect to see about 150 bps in total rate hikes over 2022-23, likely divided equally between those two years, with pauses to check the economy's temperature readings along the way.