Bank of Canada increases policy interest rate by 75 basis points, continues QT
For the American&#x27;s that don&#x27;t know.  In Canada our banks won&#x27;t give you a 25 or 30 rate.<p>We typically renew our rates every 5 years, while still amortizing our mortgages over 25-30 years.  So rate adjustments tend to hurt more than they do in the US.<p>Our overnight rate is now 3.25% so we&#x27;re a bit ahead of our neighbor to the south.<p>And our equivalent to the dot plot suggests no more rate raises this year, though we do have a chance for one more in December, but unless our inflation rate jumps again, we&#x27;re probably done until the US catches up to us.<p>I guess I should note that the new 3.25% rate is 25bps above what the BOC considers to be the neutral rate.<p>Our two year rate( the one I tend to think is the most important) is currently trading around 3.62% which is up, while the 10 year hasn&#x27;t really budged, indicating that the markets think we may be close to the end of rate hikes.<p>Our inflation rate &quot;falling&quot; to 7.6% in July from 8.4% in June also suggests that rate hikes are starting to work.<p>We&#x27;re in a weird not often seen situation where we are seemingly heading into a recession with full employment and high inflation and already high interest rates(by recent memory) while also having high debt levels for both individuals and businesses.<p>The BOC( and US FED) have been pretty clear which side they&#x27;ll come done as they have constantly said inflation is job #1, so people with debt will be feeling pain for along time to come