Interest rate hike: Why the Bank of Canada may hold off
Analysts have predicted this will be the year that the Bank of Canada raises its benchmark interest rate. And it could very well be the year it does.
Unless of course, it doesn’t.
“I think it’s a stretch,” says Derek Holt, vice-president of Scotiabank Economics.
“I think we have to entertain the distinct possibility that they are on hold throughout all of 2015 and 2016.”
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That’s certainly not the prevalent wisdom among many experts who believe that sometime in the the third quarter, around the fall of this year, Canadians could face higher borrowing costs following a .25 or .5 hike in the benchmark rate of one per cent. And that could be followed up by a couple more moderate hikes in 2016, before the rate settles at 2.0.
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