On Wednesday, the Bank of Canada increased its benchmark rate a quarter percentage point, to 4.75%. That’s the highest it’s been since 2001. A combination of stubborn inflation and an economy that just keeps humming along explains why the Bank decided it needed to hike again after a pause of several months. Scotiabank’s Chief Economist Jean-François Perrault is back this week to walk us through the decision, the reasoning behind it, why it was the right thing to do, and to explain what it means for households – especially those with variable-rate mortgages - and the economy in the coming weeks and months.
Key moments this episode:
0:54 — JF’s reaction to the decision
1:25 — Some insight into what factors drove the Bank of Canada’s decision
3:38 — Breaking down the latest inflation numbers that contributed to the hike
4:54 — What is driving Canada’s unexpectedly robust economic growth?
7:16 — JF explains why even though this seems like the right decision economically, it will still bring some pain to Canadians
9:41 — What is the likelihood of another interest rate hike in July?
10:02 — When will we see some rate relief given this latest decision?
10:57 — Does all of this make a recession this year more or less likely?
