The Bank of Canada (BoC) added a half-point to its base interest rate last week, bringing it to 4.25 percent, its highest in 15 years.
The bank also indicated that it is at, or at least close to, the point at which it can stop raising the rate, at least for now.
In the past, the BoC has said it will continue to lift rates to pull inflation back to its 2-percent target rate; in its new public statement, the bank said future rate hikes will depend on data.
After peaking at 8.1 percent in June, Canada’s inflation rate dropped back to 6.9 percent in October.
The bank is balancing a still-strong labor market and continued economic growth with an increasing weakness in consumer spending.
TREND FORECAST: With many of their mortgages variable rates, the Canadian housing sector will be hit hard by the rising interest rates. Thus, we forecast the BoC will pause in its raising interest rates next year.