Markets Think the Bank of Canada Is More Hawkish Than the Fed

Inflation Paves Way for More Canada Rate Hikes

There’s a new hawk ruling the roost in North America.

The Bank of Canada increased rates in July, citing a broadening expansion that’s put the nation atop this year’s G-7 growth leader board. And the hikes won’t stop there, judging by the forward market.

Governor Stephen Poloz is expected to outgun Janet Yellen with two hikes to the Federal Reserve’s one over the next year.

Forwards imply that the Bank of Canada will hike rates almost four times over the next three years, with a little more than two hikes priced in for its U.S. counterpart over the same stretch.

Some Canadian officials within Justin Trudeau’s government are growing concerned that the central bank’s tightening trajectory could prove too steep, especially in light of extremely elevated levels of household debt.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE