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‘We need to be very cautious’: Poloz on Next Rate Move, NAFTA and Housing

Posted July 13, 2017

Under Economic Issues, International Trade Issues

(Noah Zivitz – BNN)

While investors are ramping up expectations for another rate increase by the Bank of Canada, the central bank’s governor says there’s no guarantee on timing.

“What we’ve got to do now is monitor how the economy responds to a higher rate of interest,” Stephen Poloz told Omar Sachedina in an exclusive interview Wednesday with CTV News.

The Bank of Canada raised the target for its benchmark overnight lending rate 25 basis points on Wednesday to 0.75 per cent. It was the first time rates have gone up in this country since 2010.

The Canadian dollar surged by a full cent against the U.S. dollar as investors interpreted the bank’s decision as a more upbeat economic outlook. The implied probability of another 25-basis-point rate increase at the bank’s October meeting reached 48.5 per cent Thursday morning, compared with 37.3 per cent before the bank’s decision. Click here to read more.

Related: Why the Bank of Canada Hiked Interest Rates (Maclean’s)