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The Bank of Canada Might Not Be Done Hiking Just Yet

  • Market, analysts at odds over central bank’s policy trajectory
  • BOC is more inclined to raise rates than Fed, strategists say
Governor Stephen Poloz leaves a Bank of Canada press conference in Ottawa after holding rates steady in January.

Governor Stephen Poloz leaves a Bank of Canada press conference in Ottawa after holding rates steady in January.

Photographer: Justin Tang/Bloomberg

Investors wagering that the Bank of Canada is ready to throw in the towel on its tightening cycle are setting themselves up for disappointment, say market strategists at some of the country’s biggest banks.

As policy makers around the world pivot toward a more dovish interest-rate outlook, front-end traders are betting Canadian officials are set to follow suit and forgo raising rates again until at least 2020. Yet analysts at firms including TD Securities and Scotiabank disagree, arguing that the BOC’s confidence in Canada’s economy suggests it isn’t ready to shift to a neutral stance just yet.