Hold The Line

No, this isn’t in reference to the current trial going on in Ottawa this week!!! This was simply an update on the BOC interest rate announcement.

As expected the BOC held rates steady at the September meeting. While we will not know the deep details, data that went into the decision, and statement for a bit, we do know that the BOC overnight rate – and in turn bank Prime Rates will remain unchanged.

While holding the overnight rate, the BOC made it very clear that inflation – and inflation expectations are too high for comfort, and they will not hesitate to increase rates further if they feel inflation is becoming too sticky, or if they feel it is warranted. They specifically referenced the high YOY wage growth, and the recent uptick in gasoline prices as things they are looking at. The BOC has made it clear they will not stop until they see inflation back down to their target of 2%. Tiff and Co. have never waivered from this since the start of the hiking cycle, so I wouldn’t expect them to quit now.

Data rolling in over the next 30, 60 and 90 days will become paramount, and will help drive the decisions and rates. Watch the data closely – because the BOC surely will.