MNI BRIEF: Investors Saw 4% Rate at End of 2023- BOC Survey

Investors saw the Bank of Canada's policy interest rate declining to 4% by the end of this year and inflation slowing but remaining elevated at 2.9%, according to the debut survey of investors published Monday.

The Bank collected responses about three or four weeks before the Jan. 25 rate decision, according to a background paper. Governor Tiff Macklem hiked a quarter point to 4.5% and said he will pause if the economy advances as expected.

Investors also saw inflation at 2.2% at the end of 2024, according to the median of about 30 responses gathered. That's stronger than the Bank's forecast that inflation will return to the 2% target sometime in 2024. Former top government economist Phil Cross has also said the Bank may be too optimistic about an inflation slowdown. (See: MNI INTERVIEW: BOC Too Optimistic On CPI Slowdown: Ex Official)