Bank of Canada at 2.50%: how long before you believe the rate rises are over?

FTC Community TeamStaff7 views

The Bank of Canada raised its policy rate by 25 basis points to 2.50% on 28 October, after holding at 2.25% for a run of decisions (news). Canadian trade for September is due on 4 November (preview), and the labour survey for October follows on 6 November (preview). Both feed into how the Bank reads the economy, and both can move the Canadian dollar on the day.

Bank of Canada at 2.50%: how long before you believe the rate rises are over? — central bank rate path diagram
A central bank's policy rate path across recent meetings

Questions for members:

  1. What would you need to see before you believe the Bank of Canada has finished raising rates?
  2. Do you trade the Canadian dollar on the rate itself, or on the data behind the rate?
  3. How much weight do you give Canadian trade and jobs when you think about the next decision?
Bank of Canada at 2.50%: how long before you believe the rate rises are over? — risk-reward diagram
A risk-reward ratio of 1 to 2

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