The Bank of Canada is expected to conclude a historic year marked by high inflation and aggressive monetary policy tightening with one more interest rate hike on Wednesday.
Forecasters anticipate the central bank will raise its key interest rate, which is currently at 3.75 per cent, by either a quarter or half a percentage point next week.
Even the smaller hike would bring the interest rate to the highest it's been since 2008.
In the wake of rapidly rising inflation this year, the Bank of Canada has raised its key interest rate six consecutive times since March, racing to clamp down on inflation expectations before they became unmoored.
After raising its key rate by a historic full percentage point in July, the Bank of Canada has tapered the size of its rate hikes. In September, it announced a three-quarter percentage point rate hike, followed by half a percentage point in October.
Now, the end of the rate hike cycle appears to be near.
Bank of Canada governor Tiff Macklem said as much following the last rate decision in October.
"We are getting closer to the end of this tightening phase but we're not there yet," Macklem said in a news conference on Oct. 26.
TD chief economist Beata Caranci said the Bank of Canada's recent language on the risks around rising interest rates suggests the bank is beginning to consider what the effects of the aggressive rate hikes will be.
In a speech on Nov. 22, Bank of Canada senior deputy governor Carolyn Rogers warned recent homeowners with variable-rate mortgages would likely find the adjustment to higher interest rates painful.
Rogers cited new research from the central bank that found half of variable-rate mortgages have now hit the "trigger rate," whereby mortgage holders' monthly payments only cover interest charges.
"That's the biggest signal I take away that they're nearing the endpoint of their rate hike cycle," Caranci said.
Laval University economics professor Stephen Gordon said the research on mortgages indicates the central bank may want to pause rate hikes soon to see the effects of higher rates play out in the economy.
"Everybody knows that it takes some time for these interest rate increases to take effect," Gordon said.
Economists generally say interest rate hikes can take one to two years to be fully felt in the economy.
Former Bank of Canada governor Stephen Poloz recently warned the aggressive rate hikes will likely have a stronger effect on the economy than many anticipate.
Speaking at a conference in Ottawa hosted by Western University's Ivey Business School, the former governor said today's economy is more sensitive to interest rates than it was 10 years ago because of high debt levels.
"Does anybody here think the sensitivity of the economy to interest rate movements is less today than it was five or 10 years ago?" Poloz asked. "I think (it) is more sensitive today than it was before."
The Bank of Canada has justified its aggressive rate hikes by arguing that the economy is overheated and needs higher interest rates to bring inflation down.
Caranci said the Bank of Canada may find recent inflation data encouraging.
Canada's annual inflation rate in October was 6.9 per cent, down from a peak of 8.1 per cent in June but still well above the central bank's two per cent target.
However, Caranci noted the three-month annualized inflation rate has dropped to below four per cent.
The economy has shown other signs of slowing, including a drop in household spending in the third quarter.
If the economy is indeed slowing, though, it hasn't showed up in labour data yet. Canada's unemployment rate in November was 5.1, signalling a still hot labour market.
Labour groups have been particularly concerned about the effect rate hikes will have on the employment.
But economists like Gordon say unemployment may not rise as much as it typically does during recessions because the economy is starting from a point of very low unemployment.
"You might actually see along the way two consecutive quarters of real GDP declining" -- the technical definition of a recession -- "but I'm not going too inclined to think that's really much of a recession," he said.
Next week, market watchers will be paying attention to the size of the rate hike as well as the Bank of Canada's language in its press release for hints on whether more rate hikes should be expected.
Caranci said December may very well not be the last rate hike.
"I think we could still get one more in January." she said.
"I would not pull it off the table."
This report by The Canadian Press was first published Dec. 2, 2022
India officially protested on Saturday the Canadian government's allegation that the country's powerful home minister Amit Shah had ordered the targeting of Sikh activists inside Canada, calling it 'absurd and baseless.'
Springfield, Ohio was once a manufacturing hub. Now, people know it for Trump's comments at September's presidential debate, when he famously - and falsely - told an audience of 67 million people that Haitians eat their pets, echoing claims that had circulated on social media.
Stephen Winters says watching the U.S. election campaign from Canada as a dual citizen is like a parent watching their kid play sports.
On the same day Chip Wilson erected a controversial sign at his Vancouver mansion, the city was quietly honouring the billionaire and his wife.
Iran's supreme leader on Saturday threatened Israel and the U.S. with 'a crushing response' over attacks on Iran and its allies.
The first Black woman to lead a major U.K. political party, Kemi Badenoch is an upbeat and outspoken libertarian who thinks the British state is broken.
Spain is sending 5,000 more soldiers and 5,000 more police to the eastern region of Valencia after deadly floods this week that killed more than 200 people, Prime Minister Pedro Sanchez announced Saturday.
A federal jury on Friday convicted a former Kentucky police detective of using excessive force on Breonna Taylor during a botched 2020 drug raid that left her dead.
An orphaned squirrel that became a social media star called Peanut was euthanized after state authorities seized the beloved pet during a raid on his caretaker's home, authorities said Friday.
Stephen Winters says watching the U.S. election campaign from Canada as a dual citizen is like a parent watching their kid play sports.
On the same day Chip Wilson erected a controversial sign at his Vancouver mansion, the city was quietly honouring the billionaire and his wife.
A Quebec religious group has filed a constitutional challenge against the municipality of Waterloo after it ticketed one of its members for going door-to-door to share its message about suicide prevention.
A seniors advocacy group says it is very concerned about a decision by Nova Scotia's elections agency not to mail voter information cards because of the threat of a postal strike.
A new law in the United States will make new dressers much safer for children and could make dressers in Canada safer as well.
Windsor Mayor Drew Dilkens is joining forces with eleven other Ontario mayors in urging Premier Doug Ford to empower municipalities to take stronger action against homelessness, including the potential use of the notwithstanding clause in the Canadian Charter of Rights and Freedoms.
The first Black woman to lead a major U.K. political party, Kemi Badenoch is an upbeat and outspoken libertarian who thinks the British state is broken.
Iran's supreme leader on Saturday threatened Israel and the U.S. with 'a crushing response' over attacks on Iran and its allies.
Spain is sending 5,000 more soldiers and 5,000 more police to the eastern region of Valencia after deadly floods this week that killed more than 200 people, Prime Minister Pedro Sanchez announced Saturday.
A federal jury on Friday convicted a former Kentucky police detective of using excessive force on Breonna Taylor during a botched 2020 drug raid that left her dead.
Ukraine's President Volodymyr Zelenskyy urged its allies to stop 'watching' and take steps before North Koreans troops deployed in Russia reach the battlefield.
Serbian rescuers stopped searching for survivors on Saturday after pulling out 14 bodies from underneath tons of concrete from a fallen canopy at the entrance of a railway station in the northern city of Novi Sad.
India officially protested on Saturday the Canadian government's allegation that the country's powerful home minister Amit Shah had ordered the targeting of Sikh activists inside Canada, calling it 'absurd and baseless.'
An aggressive Chinese hacking campaign is the most active state cyber threat to Canada, the country's signals intelligence agency said on Wednesday, in the latest warning about clandestine activity by Beijing.
Canada will need a profound shift in political priorities if the country is to ramp up spending to meet its international security obligations.
A regional public health department in Idaho is no longer providing COVID-19 vaccines to residents in six counties after a narrow decision by its board.
A headset worn at home that zaps the brain with the energy of a 9-volt battery could help relieve symptoms of depression, a new study shows.
An Ontario woman is facing serious charges after police allege she pretended to be a registered nurse at several Simcoe County facilities, despite being unqualified.
Talented though they may be, monkeys will never type out the complete works of William Shakespeare, or even a short book, a new study suggests.
As Phobos, one of Mars’ two moons, passed in front of the sun, it cast a lumpy, potato-shaped shadow on the sun’s face as well as on the Martian surface.
The oldest known surviving tombstone in the United States is an elaborate display of wealth — an intricately carved slab of black limestone initially laid in the floor of the second church of Jamestown, Virginia, the first permanent British settlement in North America.
'No Other Land,' has been hailed as one of the year's most powerful documentaries, but it's stoked controversy, prompted death threats for its makers and, despite the acclaim, remains without an American distributor.
In an interview with Business Insider, Longoria talked about investing in the 2014 hit movie after the budget fell short before filming began.
Mariah Carey is finally ready.
New changes are coming into effect that aim to protect bank customers in the event of a scam or address other bank-related issues.
Whichever candidate wins the U.S. president election next Tuesday, experts say investors will be relieved to shed some uncertainty over what kinds of policies to expect.
Air Canada on Friday raised its annual core profit forecast and announced share buybacks, as the country's largest carrier benefits from strong demand for international travel.
Befitting a pop icon at midlife, Hello Kitty's 50th birthday has brought museum exhibits, a theme park spectacle and a national tour.
Matthew Horsnell began falling asleep for no reason when he was in sixth grade.
An orphaned squirrel that became a social media star called Peanut was euthanized after state authorities seized the beloved pet during a raid on his caretaker's home, authorities said Friday.
Canada's Christine Sinclair scored in her celebratory retirement match and the Portland Thorns clinched a playoff spot with a 3-0 victory over Angel City on Friday night.
Dan Vladar matched up for the first time against his old goaltending partner Jacob Markstrom, and he won in style with a shutout.
The Los Angeles Dodgers, including Shohei Ohtani and his dog, celebrated their eighth World Series championship with a downtown parade and a raucous on-field party on Friday.
Toronto police say 59 suspects are facing a total of 300 charges in connection with an auto theft and re-vinning probe.
Several Ford vehicles have been recalled in Canada due to issues with braking systems, steering and child car seat tethers.
Volkswagen has informed employee representatives that it wants to close at least three plants in Germany, the head of the company's works council said Monday.
A Vancouver man is saying goodbye to his nine-to-five and embarking on a road trip from the Canadian Arctic to Antarctica.
A Windsor teen’s social media post showing off a distinctive Windsor pizza topping has gone viral, drawing millions of views worldwide and sparking new curiosity about Windsor-style pizza.
Auston Matthews has come face to face with his look-alike. On Thursday, the Maple Leafs star met seven-year-old Grayson Joseph, who went viral for dressing up as an Auston Matthews hockey card.
A Halifax junk remover shares some of his company’s strangest discoveries.
When Leah arrived at work directing traffic around a construction site, she never expected to see a van painted in all sorts of bright colours, and covered in eclectic decorations, including a stuffed moose attached to its roof.
After 14 years of repairing and selling bicycles out of the garage of her home, a Guelph, Ont. woman’s efforts have ended – for now, at least.
Epcor says it has removed more than 20,000 goldfish from an Edmonton stormwater pond.
Witches and warlocks have been flocking to New Brunswick waterways this month, as a new Halloween tradition ripples across the province.
New Brunswicker Jillea Godin’s elaborate cosplay pieces attract thousands to her online accounts, as well as requests from celebrities for their own pieces.
On the same day Chip Wilson erected a controversial sign at his Vancouver mansion, the city was quietly honouring the billionaire and his wife.
A Vancouver man is saying goodbye to his nine-to-five and embarking on a road trip from the Canadian Arctic to Antarctica.
A Vancouver Island woman who refused to accept her daughter died of an accidental overdose is relieved the record has been set straight.
Police charged two more people in connection with a fatal shooting that happened in Brampton back in August.
A man is in serious, life-threatening condition following a stabbing in Mississauga, paramedics say.
Stephen Winters says watching the U.S. election campaign from Canada as a dual citizen is like a parent watching their kid play sports.
He inspired thousands of young journalists and continued telling Calgarians' stories until his last days.
A local organization wants to establish a permanent reminder of the sacrifice of Canadians in war.
Dan Vladar matched up for the first time against his old goaltending partner Jacob Markstrom, and he won in style with a shutout.
A rusty thumb tack was found in a mini chocolate bar after trick-or-treating in eastern Ontario, according to the Ontario Provincial Police (OPP).
Internal documents show the National Capital Commission took what it called a 'manageable risk' to lower the standard for what qualifies as thick enough ice in order to squeeze a few more skating days into the Rideau Canal Skateway season.
Though Canadians are planning to spend more than they did last year on holiday shopping, according to a new survey, wealth coaches are reminding people of the importance of budgeting.
A Quebec religious group has filed a constitutional challenge against the municipality of Waterloo after it ticketed one of its members for going door-to-door to share its message about suicide prevention.
It's that time of year again when we turn the clocks backward and gain that extra hour of much needed sleep.
Service on the green line was restored Saturday morning after multiple disruptions on the Metro over a 24-hour period caused chaos for public transit users.
An Edmonton woman is hoping to leave a smaller environmental footprint on the planet when she dies.
The government of Alberta says its new bill aimed at women's sporting divisions is about inclusion, but advocates don't agree.
An Edmonton Police Service officer was caught on camera running over a woman with a marked cruiser last month.
A seniors advocacy group says it is very concerned about a decision by Nova Scotia's elections agency not to mail voter information cards because of the threat of a postal strike.
Montreal-based company Westcliff Management, a privately owned real estate development and management company, officially own Dieppe’s Champlain Place Mall as of Halloween.
The RCMP in Yarmouth, N.S., is investigating the sudden deaths of two people known to each other.
Manitoba RCMP are looking for more information after the remains of an infant were identified.
Manitoba Premier Wab Kinew is not making any commitments on possible new municipal taxes in Winnipeg.
As the weather begins to cool down across Manitoba, it’s the perfect time to cozy up under a blanket with a nice, warm cup of tea.
Advance polling stations for the Regina civic election opened Friday morning.
Swift Current RCMP are looking for two men after a 'serious assault' in the city early Tuesday morning.
A Saskatchewan father is disappointed with the results from an autopsy, conducted on his son's body.
Erick Buhr has asked the jury to find him not guilty in his grandmother Viola Erb’s death.
Waterloo Regional Police say charges are anticipated after a tow truck operator was seriously injured helping a disabled vehicle on the side of Trussler Road in North Dumfries Friday afternoon.
Waterloo Regional Police are warning the public after two separate chocolate bars were found lodged with a needle and toothpick in Cambridge.
A Saskatchewan father is disappointed with the results from an autopsy, conducted on his son's body.
The family of a man shot and seriously injured at a jobsite 14 kilometres north of Prince Albert late last week is speaking out.
Soon, Saskatoon residents will know who of the five candidates will take the reins as mayor, and who will join the new mayor at City Hall for the next term.
An Ontario woman is facing serious charges after police allege she pretended to be a registered nurse at several Simcoe County facilities, despite being unqualified.
Two people have been charged after a group of people were attacked with a baseball bat last month in Kirkland Lake.
A pedestrian is in critical condition after they were hit by a vehicle in North Bay.
The Woodstock Police Service is looking for public help in a fatal vehicle collision investigation.
Former London Knights player, Alex Formenton, has filed a lawsuit against his ex-representation.
Lambton County OPP are investigating a break and enter in Plympton-Wyoming worth more than $70,000.
An Ontario woman is facing serious charges after police allege she pretended to be a registered nurse at several Simcoe County facilities, despite being unqualified.
Christina and Troy Durocher are still struggling to come to terms with how the justice system handled the death of their son two and a half years ago.
While online shopping has become a multi-trillion-dollar worldwide industry, a new online marketplace launched in Simcoe County in recent weeks is making it easier and more affordable to keep e-commerce local.
A pedestrian has suffered life-threatening injuries after a collision with a vehicle.
Windsor Mayor Drew Dilkens is joining forces with eleven other Ontario mayors in urging Premier Doug Ford to empower municipalities to take stronger action against homelessness, including the potential use of the notwithstanding clause in the Canadian Charter of Rights and Freedoms.
After a 3-1 loss to the Soo Greyhounds, their first home defeat of the season, the Windsor Spitfires shut out the Flint Firebirds 3-0 on Friday night.
A Vancouver Island woman who refused to accept her daughter died of an accidental overdose is relieved the record has been set straight.
Police on southern Vancouver Island are issuing a warning about the dangers of deer rutting season after a dog was gored to death by a buck earlier this week.
A B.C. Supreme Court judge has granted an order to establish a buffer zone around one of the province's largest Sikh temples this Saturday in advance of expected confrontations between protesters and Indian consular officials.
Police in Kamloops, B.C., are reminding parents and guardians to check their children's Halloween candy after receiving a report of a mother finding a razor blade in one of her daughter's treats.
More than two years after Alannah Brown and Douglas Barker were found dead north of Penticton, police are asking for help identifying a vehicle they believe was associated with the crime.
Dave Lindsey began growing giant pumpkins to bring a bit of magic to his grandkids' Halloween.
Lethbridge County and the towns of Coalhurst, Nobleford and Picture Butte and the village of Barons have signed a new regional emergency management partnership agreement.
As overnight temperatures continue to dip below freezing, the City of Lethbridge has launched its second annual snow route season ahead of winter.
The University of Lethbridge Pronghorn Athletics Annual Safe Ride Home campaign is making a return this year, but with a new name.
More than half of Ontario's 480 wildfires last summer were in northeastern Ontario, according to new data from the Ministry of Natural Resources.
A 40-year-old suspect has been charged with sexual assault following an incident Wednesday in Sault Ste. Marie.
Juanita Migwans – or 'Winnie,' as her family calls her – of M'Chigeeng First Nation has been missing for almost a month.
School staff are being struck more often, students are fighting more frequently, and police are increasingly being called to school grounds, according to data compiled and released this week by the Newfoundland and Labrador Teachers' Association.
Newfoundland and Labrador's auditor general has issued a warning about the province's financial position as the government announced it would finish the 2024-25 fiscal year with a higher-than-expected deficit.
Police in Newfoundland and Labrador have charged an off-duty RCMP officer for allegedly driving while impaired, following a crash on Sunday.
The Shopping Trends team is independent of the journalists at CTV News. We may earn a commission when you use our links to shop. Read about us.
