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Traders Now Banking on Back-to-Back Jumbo Rate Hikes in Canada

  • Odds of another 50 bps move hit 100% after inflation spikes
  • Some analysts even see a ‘solid case’ for an even bigger move
The Bank of Canada raised its policy interest rate by 50 basis points to 1% on April 13.
The Bank of Canada raised its policy interest rate by 50 basis points to 1% on April 13.Photographer: Justin Tang/Bloomberg

The Bank of Canada will likely deliver a repeat of last week’s jumbo rate hike at its next policy decision, according to market pricing.  

Trading in overnight swaps show investors are now fully pricing in a second 50-basis-point increase at the central bank’s June 1 meeting. Odds for the second outsized rate hike next month rose to 100% on Wednesday for the first time, after annual inflation blew past expectations.