Post-CPI Analyst Wrap: Potential Further Hikes [3/3]

Either Way

• Scotia: The BoC has been very clear that it is open to either another hike or a pause on January 25th. With further updates on inflation, jobs and BoC surveys between now and then plus external developments it’s prudent to say that we’re still left with a highly data dependent outcome into that meeting that could yet go either way.

Further Hike(s)

• BMO: Turning the temperature down on inflation is proving to be an achingly slow process, and we suspect this may be a theme for 2023. We are leaning to the view of one more hike in Jan to 4.5%, and this firm report does nothing to doubt that. If anything, the stickiness in core trends around 5% or higher hints at the possibility of even further rate hikes, something nobody is talking about.
• GS: We think today’s report supports our forecast of a 25bp hike in Jan, and continue to expect that a disinflationary goods impulse and falling house prices will lead the BOC to pause at the March meeting as they monitor the lagged effects from tighter policy and slowing growth to the labour market.