As lift-off looms, investors bet Bank of Canada will tame inflation
The Canadian bond market is coming to the view that expected multiple interest rate hikes in 2022 by the Bank of Canada, including one potentially this week, will bring price pressures under control, albeit at a cost of slower economic growth.
This marks a shift in perception that is underscored by moves in the so-called inflation breakeven rate, a market measure of inflation expectations. The 10-year breakeven rate has dropped below 1.9 per cent this month after touching 2.3 per cent in November, its highest level by far in data going back to 2015.
Article Written By: Fergal Smith
Original Article Posted on: Jan. 24, 2022