The Bank of Canada today released its Q2 survey of market participants and this was the most-notable question. It indicated that the BOC’s latest rate hike to 5% will be the last and that the 24% chance of a hike priced in for September will dwindle.
The gradual return to 2.50% should also be relief for home owners on variable rate mortgages and set the stage for a mid-decade improvement in the economy. Comparatively, Canada is also looking good with consensus GDP forecasts (for whatever they’re worth) for 2024 currently the highest for Canada among major developed economies.
What’s interesting is that this same survey only has Canadian growth pegged at 0.7% this year and 1.2% next year — hardly blowing the doors off. But with the latest PMIs and ongoing deindustrialization in Germany, that’s comparatively good.
The full survey is here.