As fixed mortgage rates continued to rise last week, variable-rate holders are expected to see their own increase next week, with the Bank of Canada potentially on course to raise rates by 50 bps.
All of Canada’s Big 6 banks now expect the Bank of Canada to hike its overnight target rate by 50 basis points next week, which would bring its key lending rate to 1.00%.
That follows the quarter-point hike the BoC delivered in March, and would be the first half-point rate hike since 2000. Some economists expect that to be followed by another 50-bps hike in June, while others see a more gradual pace of tightening to bring the overnight rate to 2.00% by the end of 2022.
Bond markets, meanwhile, see the overnight rate rising even more aggressively to 2.50% by year-end, or 200 basis points higher than today’s level.
“While Canada’s inflation…
