Governor Macklem and Deputy Governor Beaudry deliberately opened the door to potential 75 bps moves earlier this month. Economists at TD Securities expect a 75 bps move by the Bank of Canada (BoC) next month. 

3.25% is a materially restrictive rate in Canada

“We look for the Bank of Canada to lift the overnight rate by 75 bps in July, followed by 50 bps moves in September and October.” 

“We look for a terminal rate of 3.25%, as we expect tighter policy will have a more significant impact in Canada than in the US due to high household debt levels.”

“With central bank credibility already on shaky ground, we think it would be needlessly risky to fall short of market expectations.”