Circle March 2nd

Weekly “Focus” and Circle March 2nd

On eight scheduled dates each year, the Bank of Canada issues a press release announcing its decision for the overnight rate target, together with a short explanation of the factors influencing the decision. It didn’t happen this week but March 2nd is when the Bank of Canada is expected to raise interest rates for the first time since the Pandemic began. The overnight lending rate is still sitting at 0.25%, a full 1.50% below where it was Pre-Pandemic. Doug Porter is BMO’s Chief Economist and he expects the Bank of Canada to start moving with some urgency in March (with more increases to follow) to tackle higher inflation, which finished the year with an annual increase of 4.7%. BMO’s forecast is for inflation in Canada to average 3.8% in 2022, decreasing to an average of 2.5% in 2023. In the US, the Federal Reserve also met this week and while they announced no changes in interest rates, the markets fully expect an increase in March followed by at least three more increases during 2022. Rate increases will translate immediately into higher borrowing costs, most felt by borrowers with variable rate mortgages and lines of credit.

This week’s "Focus" from our economics team is available in our Resources Tab under Economic and
Market Updates. Click on the link https://bmo.prod.digitalagent.app/bradley.goldhar/publications.

Have a great weekend and please stay safe,

Brad

Bradley Goldhar | Senior Portfolio Manager and Senior Investment Advisor

BMO Nesbitt Burns Inc. | 1 First Canadian Place | 39th Floor | P.O. Box 150 | Toronto ON M5X 1H3 416.359.6650 (direct) | 416.359.7219 (fax) | 1-800-263-1883 (toll free)

bradley.goldhar@nbpcd.com

www.goldhargroup.com


Source: 
(i) ThomsonOne

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