No further rate hikes expected in 2023, Bank of Canada survey suggests

The Bank of Canada will not raise rates again and will start cutting a little later than previously anticipated, according to a survey of market participants released by the central bank on Monday.

The BoC’s second-quarter survey, conducted from June 8 to 19, showed a median of the participants, which include senior economists or strategists involved in Canadian financial markets, expect the bank to hold interest rates at a 22-year high of 5.00 per cent until the end of 2023, before starting to cut rates in March.

In the previous survey released in April, when the BoC’s key policy rate was at 4.50 per cent, median expectation was for a rate cut in January. Money markets still see a chance for another rate hike this year.

A median of 25 participants now also predict a 0.7 per cent gross domestic product growth at the end of 2023, instead of a 0.1 per cent contraction forecast in the last survey.

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