The tightening continues, as the Bank of Canada joined the party once again and delivered a fourth consecutive outsized interest-rate hike in a bid to slow the nation’s economy and drag inflation down from four-decade highs.
The Bank of Canada’s decision was a statement-only affair with no new forecasts.
Monetary authorities around the world are slamming on the brakes to halt a post-pandemic surge of inflation. The Reserve Bank of Australia raised its policy rate by a half-percentage point on Tuesday, and Banco Central de Chile also stunned investors with a 100-basis-point move. The European Central Bank is poised to deliver a 75-basis-point hike on Thursday and the US Federal Reserve meets later this month, with an increase of at least 50 basis points expected. The rate hike pass-the-parcel is going to continue for some time, which begs the question, at what point will the music stop? Given the embedded nature of the inflation shock, it’s probably more a symphony than a song.
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