News Analysis
The Bank of Canada’s pause on raising interest rates is in jeopardy due to the likelihood of the U.S. Federal Reserve to keep raising its federal funds rate, economists say.
CIBC deputy chief economist Benjamin Tal told The Epoch Times that the BoC can’t “divorce itself” from the Fed for too long. This is regarding how much higher the U.S. central bank can raise its policy rate compared to the Canadian central bank’s overnight rate target.
“The Bank of Canada will tolerate 50, 75, even 100 [basis points], but not more than that,” he said, speaking of how much more the Fed’s key rate can exceed the BoC’s. A basis point is equal to 0.01 percent….