The Bank of Montreal's analyst expects the Bank of Canada (BoC) to increase interest rates by another 25 basis points in July. Last week, the BoC raised the overnight rate by 25 basis points to 4.75%, the highest since 2001. The analyst indicated the better-than-expected performance of Canada's economy as a cause for increased expectations for further rate hikes. - One another factor driving interest rates up is the overheated housing market in the country which is driving prices up.
- In March, the BoC said it would pause interest rate hikes and maintain the policy rate at 4.5%.
- The BoC cited the persistence of excess demand and inflation not reaching the sustainable 2% target as reasons for increased interest rates last week.
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