CIBC Capital Markets said in a note Thursday that there are “reasonable odds” on a January rate rise but it thinks this is unlikely for several key reasons.
Firstly, it will be early March before we know how well Canada’s economy performed in the final quarter of 2017 when GDP data is released. It will also be then before the NAFTA deal is clear.
For that reason the firm’s economists expect the next interest rate to be April 2018.
Assuming a 1.25% rate in the three months to June 2018, CIBC Capital Markets then forecasts a steady pace of increases; to 1.5% by the end of December 2018, and to 1.75% by the end of June 2019.
More market update:
A growing consensus of analysts believe that the Bank of Canada has finished increasing interest rates for this year but early 2018 could bring another hike.