Generally speaking, there were two responses on Bay Street to the new North American free-trade agreement: “All that, for that?!” and “Get ready for higher interest rates!”
The Financial Post’s Geoff Zochodne did a sweep of the big banks’ economists on Oct. 1 and found that the received wisdom now is that the Bank of Canada will quicken its march to a more normal policy setting.
Bank of Montreal promptly added an extra quarter-point lift to his outlook for 2019, predicting a benchmark rate of 2.5 per cent within the next 12 months or so, a full percentage point higher than the current setting. Canadian Imperial Bank of Commerce assumes the Bank of Canada will go ahead with an increase later this month and then follow that move with another one in January, earlier than its previous forecast. Derek Burleton of Toronto-Dominion Bank also said a hike on Oct. 24 was “virtually cemented” and that the smart money now is on three additional increases next year, rather than two.
Continue reading at the Financial Post ...