Central bank expected to hike rate
Posted Sep 7, 2010 11:24 am.
This article is more than 5 years old.
The Bank of Montreal puts the chances at about 60 per cent that the governor of the Bank of Canada will boost the country’s key interest rate.
The announcement from Mark Carney will come Wednesday morning.
Economist Sal Guatieri tells 660News, he believes the governor wants to make sure the core inflation rate doesn’t rise.
“On that basis, if the bank wants to achieve its inflation target, meaning keeping inflation close to two per cent, it probably needs to adjust interest rates a little closer to normal levels but even one per cent, if that’s where rates go tomorrow would not be anywhere close to normal,” he says.
Guatieri says another quarter point increase will impact some, but for the most part, the Canadian economy should continue to grow even with interest rates well above our neighbours to the south.
