Good morning,

The probability of a January rate hike from the Bank of Canada has increased. According to Reuters, economists’ expectations surrounding the likelihood of a January rate hike by the Bank of Canada have risen, despite substantial public health restrictions that have hit the country in recent weeks. These public health restrictions pose a risk to Q1 economic growth, but are in place as a result of stretched hospital capacity. This is in contrast to the U.S., which is without broad restrictions, and the U.S. Federal Reserve, where the majority of economists’ are continuing to forecast the Fed’s first hike in March.

Josh Nye, senior economist at Royal Bank of Canada said "you maybe have a bit of disinflationary pressure in some of the services sectors that are going to be hit hardest by this, but when you have people not able to go into work, that impacts the supply side of things." Despite these concerns, economists’ are expecting the Canadian economy to outpace the U.S. throughout the rest of the year.

Please let us know if you have any questions or if there is anything our team to do to assist.

Devin