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MNI STATE OF PLAY: Canada Seen Hiking 75BPs To Highest G7 Rate

(MNI) Ottawa
OTTAWA (MNI)

Governor Macklem's move to 2.25% would be the BOC's highest since 2008.

Canada's key interest rate is likely jumping to 2.25% from 1.5% Wednesday to briefly overtake the Federal Reserve's distinction of having the G7's highest benchmark, and Governor Tiff Macklem may also signal ongoing "forceful" action alongside new a forecast showing inflation well above target into 2024.

All but one of 19 economists surveyed by MNI see the rate climbing 75 basis points in the decision at 10am EST, the biggest move since hiking a full percentage point in 1998 in a failed bid to stabilize a weak dollar. RBC, UBS and JP Morgan say a bigger move can't be ruled out. Even getting to 2.25% would restore the highest rate since October 2008, a year when it was as high as 4.25%.

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Canada's key interest rate is likely jumping to 2.25% from 1.5% Wednesday to briefly overtake the Federal Reserve's distinction of having the G7's highest benchmark, and Governor Tiff Macklem may also signal ongoing "forceful" action alongside new a forecast showing inflation well above target into 2024.

All but one of 19 economists surveyed by MNI see the rate climbing 75 basis points in the decision at 10am EST, the biggest move since hiking a full percentage point in 1998 in a failed bid to stabilize a weak dollar. RBC, UBS and JP Morgan say a bigger move can't be ruled out. Even getting to 2.25% would restore the highest rate since October 2008, a year when it was as high as 4.25%.

Keep reading...Show less