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Poloz Should Be on Guard With Fed Set to Raise, Scotiabank Says

  • Chief Economist Perrault sees Fed resuming in September
  • Bank of Canada should be thinking about rate rise next year

The U.S. Federal Reserve will raise interest rates as many as six times over the next 18 months and the Bank of Canada should be getting ready with increases of its own, Bank of Nova Scotia Chief Economist Jean-Francois Perrault said.

While both central banks will be cautious about snuffing out recoveries, the U.S. job market will have bounced back by September and the Bank of Canada has forecast inflation will be sustained at 2 percent in the second half of 2017, with the economy operating close to capacity, Perrault said Tuesday. He sees Fed Chair Janet Yellen tightening twice this year and three or four times next year, while Bank of Canada Governor Stephen Poloz begins to increase around the middle of next year.