Expert warns of food consumption habits amid rising prices
A new survey by Dalhousie University's Agri-Food Analytics Lab asked Canadians about their food consumption habits amid rising prices.
In the wake of the Bank of Canada’s unexpected rate hike, economists are pointing to further tightening in the near term.
On Wednesday, the Bank of Canada surprised the majority of experts by raising interest rates 25 basis points to 4.75 per cent, the bank’s first hike since January.
In a statement, Bank of Canada Governor Tiff Macklem said, “Excess demand in the economy looks to be more persistent than anticipated.”
Earl Davis, head of fixed income at BMO Global Asset Management, said Wednesday's rate hike is a signal that further hikes may not be far behind.
“When the Bank of Canada starts hiking, it's not just one hike, it is multiple hikes,” he told BNN Bloomberg. “So because they hike today, I do expect to see one, if not two, more coming down the line before they pause again.”
Davis had previously predicted rates would reach six per cent by the end of the year, but has since shifted that estimation to five or 5.50 per cent, though rates could reach six per cent in the U.S.
Davis added that Wednesday’s announcement comes down to “inflation expectations” going back up or stalling its decline.
“If they go again, which I anticipate they will is shooting into the crowd of inflation, because they need to drop the expectations part of it down now,” he said.
Davis isn’t alone in expecting further hikes on the way, Steven Ranson, president and CEO of Home Equity Bank, also expects more will come.
“There’s probably another 25 basis points coming maybe not in July, but possibly in September if inflation doesn’t come down, and it doesn’t seem like it is,” he said. “Getting down to that two per cent number is going to be challenging and it seems like we’re a long way from that.”
John Murray, a former deputy governor at the Bank of Canada and current senior fellow at the C.D. Howe Institute, said he predicts the central bank may increase interest rates two or three more times before the end of this year as it continues to target inflation – though what comes next is “all very uncertain.”
Murray suggested that the Bank of Canada could use other “active quantitative tightening” approaches besides interest rate hikes, such as selling off its bond inventory.
Ultimately, Murray told BNN Bloomberg that he believes the central bank will be able to bring inflation back to its two per cent target using monetary policy.
“I think central banks here and elsewhere are absolutely determined to achieve and sustain their target,” he said. “It's a question of how much tightening is needed and in what form.”
Meanwhile, Josh Nye, a senior economist at the Royal Bank of Canada, said in a statement to expect further hikes.
“Our expectation has been that if the BoC was coming off the sidelines, they would intend to hike more than once—if 4.50 per cent wasn’t restrictive enough it’s hard to think 4.75 per cent is,” he said.
Not everyone is convinced more hikes are coming, however.
“A lot will depend on the data, if we’re looking at July meeting, there’s several pieces of data that could influence that decision,” said David Doyle, head of economics at the Macquarie Group.
The next rate announcement is scheduled for July 12.
With files from Holly McKenzie-Sutter
A new survey by Dalhousie University's Agri-Food Analytics Lab asked Canadians about their food consumption habits amid rising prices.
It was evident to the federal government as early as last fall that Loblaw and Walmart might be holdouts to the grocery code of conduct, jeopardizing the project's success.
Royal commentator Afua Hagan writes that when King Charles recently admitted Catherine to the Order of the Companions of Honour, it not only made history, but it reinforced the strong bond between the King and his beloved daughter-in-law.
Charlie Woods failed to advance in a U.S. Open local qualifying event Thursday, shooting a 9-over 81 at Legacy Golf & Tennis Club.
When it comes to cardiovascular fitness, you may tend to focus on activities that move you forward, such as walking, running and cycling.
A recent decision to restrict consular services for fighting-aged Ukrainian men has made a Ukrainian man in Canada feel less certain of his next steps — and worried he could be pulled back to the war.
Ashley Dickey and her mother rented part of the same Coquitlam duplex in three different decades under three different landlords.
A man who fell into a crevasse while leading a backcountry ski group deep in the Canadian Rockies has died.
The practice of giving sedatives to people detained by police has spread quietly across the U.S. over the last 15 years, built on questionable science and backed by police-aligned experts, an investigation led by The Associated Press has found.
Mounties in Nanaimo, B.C., say two late-night revellers are lucky their allegedly drunken antics weren't reported to police after security cameras captured the men trying to steal a heavy sign from a downtown business.
A property tax bill is perplexing a small townhouse community in Fergus, Ont.
When identical twin sisters Kim and Michelle Krezonoski were invited to compete against some of the world’s most elite female runners at last week’s Boston Marathon, they were in disbelief.
The giant stone statues guarding the Lions Gate Bridge have been dressed in custom Vancouver Canucks jerseys as the NHL playoffs get underway.
A local Oilers fan is hoping to see his team cut through the postseason, so he can cut his hair.
A family from Laval, Que. is looking for answers... and their father's body. He died on vacation in Cuba and authorities sent someone else's body back to Canada.
A former educational assistant is calling attention to the rising violence in Alberta's classrooms.
The federal government says its plan to increase taxes on capital gains is aimed at wealthy Canadians to achieve “tax fairness.”
At 6'8" and 350 pounds, there is nothing typical about UBC offensive lineman Giovanni Manu, who was born in Tonga and went to high school in Pitt Meadows.