News Analysis
OTTAWA—Now is the time when the full effect of the Bank of Canada’s earliest interest rate hikes in 2022 are starting to take effect. While Canada’s central bank was caught off guard by a surprisingly strong first quarter of economic growth, it expects much weaker albeit slightly positive growth for the rest of the year.
“We’re not forecasting a major contraction. We’re not forecasting large increases in unemployment. And in that sense, it’s not what people associate with the word recession,” Bank of Canada Governor Tiff Macklem told reporters on April 12.
But some economists believe that when the full brunt of the 4.25 percentage points of rate hikes takes effect, the Canadian economy will plunge into a recession….